Question

How do you do this problem: Find the simple interest when $6,000 is deposited at an interest rate of 3% for 4 years.

Answer 1

Answer:

The simple interest is $720.

Step-by-step explanation:

This is a simple interest problem.

The simple interest formula is given by:

$E = P*I*t$

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

In this problem, we have that:

$P = 6000, r = 0.03, t = 4$

So

$E = P*I*t = 6000*0.03*4 = 720$

The simple interest is $720.