How much simple interest is earned after 5 years if a bank lends $10,000 to a business for 8 percent a year?(1 point)
To calculate the simple interest earned after 5 years, we can use the formula:
Interest = Principal × Rate × Time
Given:
Principal (P) = $10,000
Rate (R) = 8% = 0.08 (expressed as decimal)
Time (T) = 5 years
Plugging in the values into the formula:
Interest = $10,000 × 0.08 × 5
Interest = $4,000
Therefore, the simple interest earned after 5 years is $4,000.