Question

Edwin Pritchard deposited 7,500 in a 3 - year, time - deposit account that pays simple interests at a 5.9% annual rate. What total amount of interest will Edwins deposit earn in three years?

Answer 1

Answer: Edwin's deposit will earn an interest of $1327.50

We determine the simple interest on an amount deposited with the following formula:

`SI = P*N*R`

where

SI = Simple Interest

P = Principal or the amount deposited

N = Number of years for which the deposit is made

R = annual rate of interest on the principal

Substituting the values from the question in the formula above we get,

`SI = 7500 * 3 * 0.059`

`SI = 1327.50`