A sum of $3500 is invested at simple interest and amounts to $6020 after 3 years.calculate the total interest
The interest earned each year is r/100 * 3500. So, after 3 years, the interest amounts to the amount of increase:
3500*3r/100 = 6020-3500
To calculate the total interest, we first need to find the interest earned per year and then multiply it by the number of years.
The formula for simple interest is: I = P × r × t, where
I is the interest earned,
P is the principal amount (the initial investment),
r is the interest rate per year, and
t is the number of years.
In this case, we know that the principal amount (P) is $3500 and the total amount after 3 years is $6020.
Now, let's solve for the interest rate per year (r). Rearranging the formula gives us: r = I / (P × t).
Substituting the given values into the formula, we have: r = (6020 - 3500) / (3500 × 3).
Calculating this, we get: r = 0.0476 (rounded to four decimal places).
Next, we can calculate the interest earned for the 3-year period using the formula: I = P × r × t.
Substituting the values, we have: I = 3500 × 0.0476 × 3 = $499.80.
Therefore, the total interest earned is $499.80.