Question

Pam deposited $890 in a savings account, with three percent simple interest. How much interest will she earn in five years?
1.) 26.70
2.) 133.50
3.) 103.30
4.) 96.33

Answer 1

The answer is option 2. Pam will earn an interest of $133.50 from his savings account of $890 with an interest of 3%. Simple interest, also known as flat rate interest, is an interest to be paid or earned each year having a fixed percentage from a principal amount. It is calculated as follows:
$890 x .03 x 5 = $133.50