Question

How much simple interest can be earned in one year on $800 at 6%

Answer 1

The simple interest is defined as

`I=P\cdot r\cdot t`

Where P is the principal, r is the interest rate and t is times in years. Replacing all given information, and using 0.06 as 6%, we have

`I=800\cdot0.06\cdot1=48`

Therefore, the simple interest is $48.