If a person invests $3000 at a simple interest rate of 7% per annum, how much in

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Question: If a person invests $3000 at a simple interest rate of 7% per annum, how much interest will he earn in 6 years?

Options:

Correct Answer: $1260

Solution:

Simple Interest = (3000 × 7 × 6) / 100 = $1260.

If a person invests $3000 at a simple interest rate of 7% per annum, how much interest will he earn in 6 years?

If a person invests $3000 at a simple interest rate of 7% per annum, how much interest will he earn in 6 years?

Step 1: Identify the principal amount (the initial investment). In this case, it is $3000.
Step 2: Identify the interest rate. Here, it is 7% per annum.
Step 3: Identify the time period for the investment. In this case, it is 6 years.
Step 4: Use the simple interest formula: Simple Interest = (Principal × Rate × Time) / 100.
Step 5: Plug in the values: Simple Interest = (3000 × 7 × 6) / 100.
Step 6: Calculate the multiplication: 3000 × 7 = 21000, then 21000 × 6 = 126000.
Step 7: Divide by 100: 126000 / 100 = 1260.
Step 8: The total interest earned after 6 years is $1260.

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