Alfred wants to invest N4,000 at 6% simple interest rate for 5 years. How much interest will he receive?
Question
Alfred wants to invest N4,000 at 6% simple interest rate for 5 years. How much interest will he receive?
Solution
To calculate the simple interest, you can use the formula:
Interest = Principal x Rate x Time
where:
- Principal is the initial amount of the loan or investment, which in this case is N4,000.
- Rate is the annual interest rate, which in this case is 6% or 0.06 (when expressed as a decimal).
- Time is the length of time the money is invested for, which in this case is 5 years.
Substituting these values into the formula gives:
Interest = N4,000 x 0.06 x 5
So, Alfred will receive N1,200 as interest.
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