Question

Compute the amount of interest earned in the following simple interest problem. A deposit of $100 at 8% for 20 years = _____. $1.60 $16.00 $160.00 $1,600.00

Answer 1

Initial deposit = 100 dollars
Interest = 8% = 0.08
time of deposit - 20 years or 240 months.
Annual Rate :
=> 100 dollars * .08 = 8 dollars per year
=> 8 * 20 = 160 dollars for 20 years.

Answer 2

Answer:

C. $160.

Step-by-step explanation:

We are asked to find the amount of simple interest earned from a deposit of $100 at 8% for 20 years.  

We will use simple interest formula to solve our given problem

$I=Prt$, where,

$I=\text{Amount of interest}$,  

$P=\text{Principal amount}$,  

$r=\text{Interest rate in decimal form}$,  

$T=\text{Time in years}$.

Let us convert our given interest rate in decimal form.

$8\%=\frac{8}{100}=0.08$

Upon substituting our given values in above formula we will get,

$I=100*0.08*20$

$I=160$

Therefore, the amount of interest earned is $160 and option C is the correct choice.