If a sum of money is invested at a simple interest rate of 6% per annum, how muc
Practice Questions
Q1
If a sum of money is invested at a simple interest rate of 6% per annum, how much interest will be earned on a principal of $8000 after 4 years? (1920)
$1920
$2400
$3200
$4800
Questions & Step-by-Step Solutions
If a sum of money is invested at a simple interest rate of 6% per annum, how much interest will be earned on a principal of $8000 after 4 years? (1920)
Step 1: Identify the principal amount (P). In this case, P = $8000.
Step 2: Identify the interest rate (R). Here, R = 6%, which can be written as a decimal: 0.06.
Step 3: Identify the time period (T). In this case, T = 4 years.
Step 4: Use the simple interest formula: SI = PRT.
Step 5: Substitute the values into the formula: SI = 8000 * 0.06 * 4.
Step 6: Calculate the interest: 8000 * 0.06 = 480, then 480 * 4 = 1920.
Step 7: The total interest earned after 4 years is $1920.
Simple Interest Calculation – Understanding how to calculate simple interest using the formula SI = PRT, where SI is the simple interest, P is the principal amount, R is the rate of interest, and T is the time in years.
