Question

Don invests $12,000 into an account that pays 8.25% simple interest. How much interest does his account earn after 4 years?

Answer 1

Answer:

$3960

Step-by-step explanation:

Given parameters:

Principal = $12,000

Simple interest  = 8.25%

Time  = 4yrs

Unknown:

Interest earned  = ?

Solution:

To solve this problem, we have to use the simple interest formula shown below:

 Simple interest  = $\frac{PRT}{100}$

P is the principal

R is the rate

T is the time

Now insert the parameters and solve;

  Simple interest  = $\frac{12000 x 8.25 x 4}{100}$   = $3960