Mr. Dunn invested $1,000 at an annual interest rate of 5% for 3 years.

How much simple interest does Mr. Dunn earn after 3 years?


To calculate the simple interest Mr. Dunn earns after 3 years, we use the formula for simple interest:

\[
\text{Simple Interest} = P \times r \times t
\]

where:
- $P$ is the principal (initial investment),
- $r$ is the annual interest rate (in decimal form),
- $t$ is the time the money is invested for, in years.

For Mr. Dunn:
- $P = 1000$,
- $r = 5\% = 0.05$,
- $t = 3$ years.

Now, calculating the simple interest:

\[
\text{Simple Interest} = 1000 \times 0.05 \times 3 = 150
\]

So, Mr. Dunn earns **$150** in simple interest after 3 years.

Would you like more details or have any questions?

Here are 5 related questions to explore further:
1. How much total amount will Mr. Dunn have after 3 years (principal + interest)?
2. How does compound interest differ from simple interest in this context?
3. What would the simple interest be if the interest rate were 6% instead of 5%?
4. How much interest would Mr. Dunn earn after 5 years at the same rate?
5. What is the formula for calculating compound interest?

**Tip**: Always check whether interest is compounded or simple—this makes a big difference over time!

Mr. Dunn invested $1,000 at an annual interest rate of 5% for 3 years. How much simple interest does Mr. Dunn earn after 3 years?

Learn how to calculate simple interest for a $1,000 investment at a 5% annual interest rate over 3 years. This problem involves key concepts like the simple interest formula and percentage calculations, perfect for students in Grades 5-7.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation