Question

Compute the amount of interest earned in the following simple interest problem. A deposit of $100 at 8% for 20 years =

1160
116.00
1160.00
11,600 00

Answer 1

The amount of interest earned is US$ 160 and none of the alternatives is correct.

Explanation:

Let's use the formula for calculating the interest in a simple interest problem, this way:

Interest earned = (Principal * Interest rate * time in years)

Replacing with the real values, we have:

Interest earned = (100 * 0.08 * 20)

Interest earned = 160

The amount of interest earned is US$ 160 and none of the alternatives is correct.