Sam invested $2,500 for 2 years in a savings account. The savings account paid an annual simple interest rate of 2.5%. How much interest did Sam earn during the 2 years?
$2,625.00
$62.50
$1,250.00
$125.00
To calculate the interest earned during the 2 years, we can use the formula: Principal * Rate * Time.
Given that the principal is $2,500, the rate is 2.5% (or 0.025 as a decimal), and the time is 2 years, we can substitute these values into the formula to find the interest earned:
Interest = $2,500 * 0.025 * 2
Interest = $125.00
Therefore, Sam earned $125.00 in interest during the 2 years.