Sol deposited $3,200 in a savings account. How much would he earn
in two years if the bank paid 7.25% simple interest?
a. $432
b. $480.82
c. $3,664
d. $464
The formula for simple interest is:
Interest = Principal x Rate x Time
In this problem, the principal (or original amount) is $3,200, the rate is 7.25%, and the time is 2 years. Plugging these values into the formula, we get:
Interest = $3,200 x 0.0725 x 2
Interest = $464
Therefore, Sol would earn $464 in two years if the bank paid 7.25% simple interest. The answer is (d) $464.