Problema Solution
Bill deposits $200.00 into an account that pays simple interest at a rate of 5% per year. How much interest will he be paid in in the first 4 years?
Answer provided by our tutors
P = $200.00 the principal
r = 0.05 or 5% annual interest
t = 4 years
I = interest
I = P*r*t
I = 200*0.05*4
I = $40
There will be $40 interest paid in the first 4 years.