Constance invested $4500 for 3 years in a savings account paying simple interest with a yearly interest rate of 3.5%. How much simple interest did she earn?
Please show your work :)
Each year she gets 3.5% or 0.035 time the amount invested. So, after 3 years, that's
4500 * 0.035 * 3
Review your formula: I = Prt, right?
To find the simple interest earned by Constance, we can use the formula:
Simple Interest = Principal × Rate × Time
First, let's convert the interest rate from a percentage to a decimal. We divide the percentage by 100:
Rate = 3.5% ÷ 100 = 0.035
Now we can substitute the given values into the formula:
Principal = $4500
Rate = 0.035
Time = 3 years
Simple Interest = $4500 × 0.035 × 3
Multiplying these values together gives us:
Simple Interest = $472.50
Therefore, Constance earned $472.50 in simple interest after 3 years.