A person invests $2000 at a rate of 6% per annum. How much interest will he earn
Practice Questions
Q1
A person invests $2000 at a rate of 6% per annum. How much interest will he earn in 4 years under simple interest? (2023)
$480
$4800
$240
$2400
Questions & Step-by-Step Solutions
A person invests $2000 at a rate of 6% per annum. How much interest will he earn in 4 years under simple interest? (2023)
Step 1: Identify the principal amount (P). In this case, P = $2000.
Step 2: Identify the rate of interest (r). Here, r = 6%.
Step 3: Identify the time period (t) in years. In this case, t = 4 years.
Step 4: Use the simple interest formula: SI = P * r * t / 100.
Step 5: Substitute the values into the formula: SI = 2000 * 6 * 4 / 100.
Step 6: Calculate the multiplication: 2000 * 6 = 12000, then 12000 * 4 = 48000.
Step 7: Divide by 100: 48000 / 100 = 480.
Step 8: The interest earned in 4 years is $480.
Simple Interest Calculation – Understanding how to calculate simple interest using the formula SI = P * r * t / 100, where P is the principal amount, r is the rate of interest, and t is the time in years.
