Question

Simple interest=Pxrxt

If the principal is $200 and the interest rate is 4 percent, what is the simple interest earned in one year

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Answer 1

Simple interest earned = $8

Explanation:

A = P(1 + rt)

Where 'P' is the principal, 'r' is the rate and 't' is time.

A = $200(1 + 0.04(1)) = $208

Interest earned = Amount after the 1 year minus Principal

i.e Interest = $208 - $200 = $8