A principal of $2000 is invested for 5 years at a simple interest rate of 3%. Wh

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Question: A principal of $2000 is invested for 5 years at a simple interest rate of 3%. What is the total amount at the end of 5 years?

Options:

Correct Answer: $2400

Solution:

Total Amount = P + Simple Interest = 2000 + (2000 * 0.03 * 5) = 2000 + 300 = 2300.

A principal of $2000 is invested for 5 years at a simple interest rate of 3%. What is the total amount at the end of 5 years?

A principal of $2000 is invested for 5 years at a simple interest rate of 3%. What is the total amount at the end of 5 years?

Step 1: Identify the principal amount (P), which is $2000.
Step 2: Identify the interest rate, which is 3% (or 0.03 in decimal form).
Step 3: Identify the time period, which is 5 years.
Step 4: Calculate the simple interest using the formula: Simple Interest = P * Rate * Time.
Step 5: Substitute the values into the formula: Simple Interest = 2000 * 0.03 * 5.
Step 6: Calculate the simple interest: 2000 * 0.03 = 60, then 60 * 5 = 300.
Step 7: Add the simple interest to the principal to find the total amount: Total Amount = P + Simple Interest.
Step 8: Substitute the values: Total Amount = 2000 + 300.
Step 9: Calculate the total amount: 2000 + 300 = 2300.

Simple Interest Calculation – Understanding how to calculate simple interest using the formula SI = P * r * t, where P is the principal, r is the rate, and t is the time.