Question

a.) HOW DO YOU COMPUTE SIMPLE INTEREST?

Answer 1

Simple Interest can be computed by using the below formula;

$I=P\ast r\ast t$

Where I = Simple interest earned after a specified number of years

P = the principal( the initial money invested)

r = annual rate of interest

t = time(in years)

Let's pick an example, let's assume someone decided to invest $200 for 4 years with an interest rate of 3%;

From the above example, our P = $200, r = 3% = 0.03 and t = 4, so our simple interest will then be;

$\begin{gathered} I=200\ast0.03\ast4 \\ =24 \end{gathered}$

Therefore, the simple interest will be $24.