Question

Lorraine invested $5,500 in a savings account with a yearly interest rate of 6% for 9 years. How much simple interest did she earn?

A. $330
B. $2,970
C. $297
D. $3,300

Answer 1

Hey !

the answer is B) $2,970 , because :

(5500*6\100) * 9 = 2970$

Answer 2

The formula for simple interest is

F = P*(1 + n*i)

where F is the future worth of the money
P is the present worth
n is the numbe of years
i is the interest rate

substituting values, we get a future worth of $8470

The earnings is therefore $8470 - $5500 = $2970