How much simple interest is earned after 5 years if a bank lends $10,000 to a business for 8 percent a year?
To calculate the simple interest earned, we can use the formula:
Simple Interest = Principal x Rate x Time
Where:
Principal = $10,000
Rate = 8% = 0.08 (since it's given as a percentage, we divide by 100)
Time = 5 years
Plugging the values into the formula, we get:
Simple Interest = $10,000 x 0.08 x 5
Simple Interest = $4,000
Therefore, the simple interest earned after 5 years is $4,000.
How much simple interest is earned after 3 years if a person invests $2,000 at 7 percent a year?
To calculate the simple interest earned, we can use the same formula:
Simple Interest = Principal x Rate x Time
Where:
Principal = $2,000
Rate = 7% = 0.07
Time = 3 years
Plugging the values into the formula, we get:
Simple Interest = $2,000 x 0.07 x 3
Simple Interest = $420
Therefore, the simple interest earned after 3 years is $420.