Question 20
Points: 1
A principal amount of $2000 is borrowed at a simple annual interest rate of 5% for a period of 3 years. Calculate the simple interest earned.

A.
$300
B.
$200
C.
$150
D.
$350

The formula for calculating simple interest is:

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

Where:
- $ P $ is the principal amount (in this case, $2000),
- $ r $ is the annual interest rate (5% or 0.05),
- $ t $ is the time in years (3 years).

Substitute the given values into the formula:

\[
I = 2000 \times 0.05 \times 3 = 300
\]

So, the simple interest earned is **$300**.

The correct answer is:
**A. $300**

Would you like more details or have any questions?

---

Here are 5 related questions for further practice:
1. What would the simple interest be if the rate was 6% for 4 years?
2. How much total amount would be paid back after 3 years, including both principal and interest?
3. What is the difference between simple and compound interest for a given amount?
4. How would the interest change if the principal amount was $2500 instead?
5. Can you calculate the interest for a period of 2.5 years?

**Tip:** Always ensure the interest rate is converted into decimal form (e.g., 5% becomes 0.05) before using it in calculations.

A principal amount of $2000 is borrowed at a simple annual interest rate of 5% for a period of 3 years. Calculate the simple interest earned.

A. $300
B. $200
C. $150
D. $350

Learn how to calculate simple interest for a principal of $2000 at an annual rate of 5% over 3 years. This example demonstrates the simple interest formula, making it a perfect introduction for students in Grades 6-8.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation