A sum of $800 is invested at a rate of 5% per annum for 3 years. What will be th

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Question: A sum of $800 is invested at a rate of 5% per annum for 3 years. What will be the total amount at the end of 3 years?

Options:

Correct Answer: $840

Solution:

Total Amount = Principal + Simple Interest = 800 + (800 * 5 * 3) / 100 = 800 + 120 = $920.

A sum of $800 is invested at a rate of 5% per annum for 3 years. What will be the total amount at the end of 3 years?

A sum of $800 is invested at a rate of 5% per annum for 3 years. What will be the total amount at the end of 3 years?

Step 1: Identify the principal amount, which is $800.
Step 2: Identify the interest rate, which is 5% per annum.
Step 3: Identify the time period, which is 3 years.
Step 4: Calculate the simple interest using the formula: Simple Interest = (Principal * Rate * Time) / 100.
Step 5: Substitute the values into the formula: Simple Interest = (800 * 5 * 3) / 100.
Step 6: Calculate the simple interest: (800 * 5 * 3) = 12000, then divide by 100 to get 120.
Step 7: Add the simple interest to the principal to find the total amount: Total Amount = Principal + Simple Interest = 800 + 120.
Step 8: Calculate the total amount: 800 + 120 = 920.

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