If a person invests $1000 at an interest rate of 5% per annum, what will be the

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Question: If a person invests $1000 at an interest rate of 5% per annum, what will be the total amount after 3 years using simple interest?

Options:

Correct Answer: $1150

Solution:

Simple Interest = Principal * Rate * Time = 1000 * 0.05 * 3 = 150. Total Amount = Principal + Interest = 1000 + 150 = 1150.

If a person invests $1000 at an interest rate of 5% per annum, what will be the total amount after 3 years using simple interest?

If a person invests $1000 at an interest rate of 5% per annum, what will be the total amount after 3 years using simple interest?

Step 1: Identify the principal amount (the initial investment). In this case, it is $1000.
Step 2: Identify the interest rate. Here, it is 5% per annum, which can be written as 0.05 in decimal form.
Step 3: Identify the time period for the investment. In this case, it is 3 years.
Step 4: Calculate the simple interest using the formula: Simple Interest = Principal * Rate * Time.
Step 5: Plug in the values: Simple Interest = 1000 * 0.05 * 3.
Step 6: Calculate the simple interest: 1000 * 0.05 = 50, then 50 * 3 = 150. So, the simple interest is $150.
Step 7: Calculate the total amount after 3 years by adding the simple interest to the principal: Total Amount = Principal + Interest.
Step 8: Plug in the values: Total Amount = 1000 + 150.
Step 9: Calculate the total amount: 1000 + 150 = 1150.

Simple Interest Calculation – Understanding how to calculate simple interest using the formula: Interest = Principal * Rate * Time.