Studdy AI Logo
Math  /  Numbers & Operations

Question4. Simple Interest: You invest $1,200\$ 1,200 in a savings account that earns 4%4 \% simple interest per year. How much interest will you earn in 3 years?

Studdy Solution

STEP 1

1. The principal amount invested is $1200 \$1200 .
2. The annual simple interest rate is 4% 4\% .
3. The time period for the investment is 3 3 years.
4. We are using the simple interest formula to calculate the interest earned.

STEP 2

1. Define the variables.
2. Apply the simple interest formula.
3. Calculate the interest earned.

STEP 3

Define the variables: - Principal (P P ) = $1200 \$1200 - Annual interest rate (r r ) = 4%=0.04 4\% = 0.04 - Time (t t ) = 3 3 years

STEP 4

Use the simple interest formula: I=P×r×t I = P \times r \times t

STEP 5

Substitute the values into the formula to calculate the interest: I=1200×0.04×3 I = 1200 \times 0.04 \times 3

STEP 6

Perform the multiplication: I=1200×0.04×3=1200×0.12=144 I = 1200 \times 0.04 \times 3 = 1200 \times 0.12 = 144
The interest earned in 3 years is:
$144\boxed{\$144}

Was this helpful?

Studdy solves anything!

banner

Start learning now

Download Studdy AI Tutor now. Learn with ease and get all help you need to be successful at school.

ParentsInfluencer programContactPolicyTerms
TwitterInstagramFacebookTikTokDiscord