Answer:
Profit - principal (2nd year) = $318
Profit - principal (3rd year) = $327
Profit at the end of 3rd year = $27
Step-by-step explanation:
We know,
Simple Interest (Profit) = Principal × Interest rate × number of years
Here,
Principal, p = $300;
Interest rate, r = 3% = 0.03
Number of years, n = 1
Therefore, they have calculated the interest = $300 × 0.03 = $9
Therefore, Profit + Principal = $9 + $300 = $309 after 1 year.
After the 2nd year, Profit - Principal = Principal + (P × r × n)
Profit - Principal = $300 + (300 × 0.03 × 2) = $300 + $18 = $318
Profit - principal after 3rd year = Principal + (P × r × n)
= $300 + (300 × 0.03 × 3) = $300 + $27 = $327
Therefore, I will earn $27 as interest at the end of the 3rd year.
