If you invest $5,000 at an annual simple interest rate of 4%, how much interest will you earn in 3 years?
Question
If you invest $5,000 at an annual simple interest rate of 4%, how much interest will you earn in 3 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 invested, which in this case is $5,000.
- Rate is the annual interest rate, which in this case is 4% or 0.04 when expressed as a decimal.
- Time is the number of years the money is invested for, which in this case is 3 years.
Substituting these values into the formula gives:
Interest = $5,000 x 0.04 x 3
So, the interest earned in 3 years would be $600.
Similar Questions
Assuming you invest $1000 at an annual interest rate of 5%, compounded annually, how much will your investment have grown after 5 years?
Alfred wants to invest N4,000 at 6% simple interest rate for 5 years. How much interest will he receive?
If you invest $76 000 into a term deposit that offers a fixed interest rate of 5.6% p.a. for a period of 5 years, how much simple interest will be earned?
How much money should be deposited in a bank for half a year at an interest rate of 4% p.a. in order to gain $5 000 simple interest?
Aman invested Rs 25,000 in a fixed deposit with a simple interest rate of 3.75%. How much interest will he earn after 4 years?Options3250395037504150
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.