Question

How much simple interest would be earned on a certificate of deposit worth

$2,000 over a period of 5 years with an interest rate of 2%?

Answer 1

$208.16

Explanation:

Multiply 2000 · 0.02 = 40

Add 40 to 2000

2040

Multiply 2040 by 0.02 = 40.8

Add 2040 + 40.8

2080.8

Multiply 2080.8 · 0.02 = 41.61

Add.

2122.416

Multiply by 0.02

42.44832

Add.

2164.86342

That was 5 years

Now we add all the interest earned together

40 + 40.8 + 41.616 + 42.44832 + 43.2972864

The answer is 208.1616064

Round it up to nearest hundredth

208.16

Hope this helped :)