Question

Jim deposits 6000 into an account that pays simple interest at a rate of 2% per year. How much interest will he be paid in the first 5 years?

Answer 1

$600 interest will be paid in the first 5 years

Explanation:

Simple interest is calculated only on the principal or initial amount deposited. Jim deposits 6000 into an account that pays simple interest at a rate of 2% per year. The formula for simple interest is expressed as

I = PRT/100

Where

I represents interest after the given time.

R represents the interest loan on the principal.

T represent number of time in years.

P represents principal or initial amount deposited.

From the information given,

R = 2

P = 6000

T = 5

I = (6000 × 2 × 5)/100 = $600