Question

If $200 is put in the bank and each year the account earns 5% simple interest,

then how much interest will be earned in two years?
$10
$20
$30
$100

Answer 1

Answer: $20 (choice B)

Work Shown:

i = P*r*t

i = 200*0.05*2

i = 20

A quick mental shortcut is to double the 5% interest to get 10%, since this occurs over 2 years. Then taking 10% of something is the same as moving the decimal point one spot to the left. So we go from 200 to 20