Question

Alan deposits $4000 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

Formula:  i = p*r*t, where p is the initial amount, r is the interest rate as a decimal fraction, and t is the time in years.  Then,

i = $4000(0.05)(5) = $1000.