Question

Mary disposed $7,000 into an account that pays simple interest at a rate of 5% per year. How much interest will she be paid in the first 3 years?

Answer 1

The formula for simple interest

$A=P(1+rt)^{}$

Where

A is the amount

P is the principal

r is the rate

t is the time

in this case

P=7000

r=5%

t=3

we substitute the values

$A=7000(1+(0.05\cdot3))$

$A=8050$

the interest is

8050-7000= 1050