Question

You want to put some money in a simple interest account. It pays 6% interest annually for 2 years. You would like to earn $750 in interest. How much money do you need to put in?

A: $90
B: $6,250
C:$9,000
D:$25,000

Answer 1

simple interest is just 6% of original/principal balance every year (annually).
If the Principal balance is "P"
I = Prt

750 = 0.06P + 0.06P
750 = P(0.06)(2)
750 = 0.12P
6,250 = P

Answer B.