A person invests $2500 at a simple interest rate of 10% per annum. How much inte

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Question: A person invests $2500 at a simple interest rate of 10% per annum. How much interest will he earn in 6 years?

Options:

Correct Answer: $300

Solution:

Simple Interest = 2500 × 10 × 6 / 100 = $1500.

A person invests $2500 at a simple interest rate of 10% per annum. How much interest will he earn in 6 years?

A person invests $2500 at a simple interest rate of 10% 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 $2500.
Step 2: Identify the interest rate. Here, it is 10% per annum.
Step 3: Identify the time period for which the money is invested. 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 = 2500 × 10 × 6 / 100.
Step 6: Calculate the interest: 2500 × 10 = 25000, then 25000 × 6 = 150000, and finally 150000 / 100 = 1500.
Step 7: The total interest earned after 6 years is $1500.

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