Jessica deposits $2000 into an account that pays simple interest at a rate of 3% per year. How much interest will she be paid in the first 5 years?$
Question
Jessica deposits $2000 into an account that pays simple interest at a rate of 3% per year. How much interest will she be paid in the first 5 years?
Solution
To calculate the simple interest, you can use the formula:
Interest = Principal x Rate x Time
where:
- Principal is the initial amount of money that was deposited or loaned. In this case, it's $2000.
- Rate is the annual interest rate. In this case, it's 3% or 0.03 when expressed as a decimal.
- Time is the length of time the money is deposited or borrowed for, in years. In this case, it's 5 years.
Substituting these values into the formula gives:
Interest = 300
So, Jessica will be paid $300 in interest in the first 5 years.
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