Question

if you invest $250.00 at a 4% interest rate what will be the interest

Answer 1

The amount of interest you would earn in one (1) year is equal to $10.

Given the following data:

• Interest rate = 4% = 0.04

• Principal = $250.00

• Time = 1 year

To determine how much interest he would earn in one (1) year:

How to calculate simple interest

Mathematically, simple interest is given by this formula:

$I = PRT$

Where:

• S.I is the simple interest.

• P is the principal or starting amount.

• R is the interest rate.

• T is the time measured in years.

Substituting the given parameters into the formula, we have;

$I=250 \times 0.04 \times 1$

Simple interest = $10

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