Question

Bertalan deposits $3,000 in a new savings account that earns 1.2% simple interest.How much interest will Bertalan earn in 3 years if he makes no other deposits or withdrawals?

Answer 1

Simple interest formula:

$I=P\cdot r\cdot t$

I is the interest earned

P is the principal

r is the interest rate (in decimals)

t is the time (in years)

For the given situation:

$\begin{gathered} P=3,000 \\ r=\frac{1.2}{100}=0.012 \\ t=3 \\ \\ I=3,000\cdot0.012\cdot3 \\ I=108 \end{gathered}$Then, Bertalan will earn $108 in interest in 3 years