Question

Rafael deposits $300 into an account that pays simple interest at a rate of 4% per year. How much interest will he be paid in the first 6 years?

Answer 1

$72

Explanation:

You are going to want to use the simple interest formula for this. The one below is modified for solving the interest earned.

`I=Prt`

I = interest amount

P = principal amount

r = interest rate (decimal form)

t = time

First, change 4% into its decimal form:

4% ->
`(4)/(100)` -> 0.04

Next, plug in the values:

`I=300(0.04)(6)`

`I=72`

Rafael earned $72 worth of interest in the first 6 years.