Question

Omar deposits $300 into an account that pays simple interest at a rate of 5% per year. How much Interest will he be paid in the first 5 years .

Answer 1

So,

Remember that the formula for simple interest is:

$I=PRT$

I is the interest; this is what you're solving for.

P is the principle; the amount of money ($).

R is the rate; the percentage rate (%).

T is the time. (In years)

If we replace our values:

$\begin{gathered} I=300\cdot0.05\cdot5 \\ I=75 \end{gathered}$

Therefore, the interest is $75.