Question

Mary had $220 in her Christmas Club Account which earned 4% APR simple interest for the year. Calculate the amount of interest which she earned after 6 years.

Answer 1

Since we know that $\text{Simple interest}=\frac{PRT}{100}$, where P is principle amount, R is interest rate and T is time.

Now let us substitute our given information in simple interest formula.

$\text{Simple interest}=\frac{220\cdot4\cdot6}{100}$

$\text{Simple interest}=\frac{5280}{100}$

$\text{Simple interest}=52.80$

Therefore, Mary will earn $52.80 after 6 years.