Question

You invest $2000 in a bank account. Find the amount of simple interest you earn in two years for an annual interest rate of 5.5%. Use the formula for simple interest I = p · r · t, where I is the interest, p is the principal, r is the annual interest rate, and t is the time in years.

Answer 1

$220 is the amount of simple interest you will earn

Explanation:

I = p * r * t

Principle = $2000

Rate = 5.5% (you need to change this to a decimal by dividing by 100) or

0.055

Time = 2 years

I = 2000 * 0.055 * 2

I = $220