A invests $2000 at a rate of 5% per annum simple interest. How much interest wil

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Question: A invests $2000 at a rate of 5% per annum simple interest. How much interest will he earn in 3 years?

Options:

Correct Answer: $300

Solution:

Simple Interest = Principal * Rate * Time / 100 = 2000 * 5 * 3 / 100 = $300.

A invests $2000 at a rate of 5% per annum simple interest. How much interest will he earn in 3 years?

A invests $2000 at a rate of 5% per annum simple interest. How much interest will he earn in 3 years?

Step 1: Identify the principal amount (the initial amount of money). In this case, it is $2000.
Step 2: Identify the interest rate. Here, it is 5% per annum.
Step 3: Identify the time period for which the money is invested. In this case, it is 3 years.
Step 4: Use the simple interest formula: Simple Interest = Principal * Rate * Time / 100.
Step 5: Plug in the values: Simple Interest = 2000 * 5 * 3 / 100.
Step 6: Calculate the multiplication: 2000 * 5 = 10000, then 10000 * 3 = 30000.
Step 7: Divide by 100: 30000 / 100 = 300.
Step 8: The interest earned after 3 years is $300.

Simple Interest – The calculation of interest earned on a principal amount over a specified time period at a fixed rate.