Question

The Principal Interest Rate $12,000, interest rate 4.25%, and Time 5 years, what is the simple interest?

Answer 1

After `5` years at a rate of `4.25%`, `$12,000` will earn `$2,550` interest.

Explanation:

The formula for finding simple interest is

`I = prt`

where `I` is the interest earned, `p` is the principal, `r` is the interest rate expressed as a decimal, and `t` is the time of the investment expressed in years.

For the information given and requested, fill in the values in the appropriate positions and multiply. Remember that `4.25% = 0.0425` as a decimal.

`I = 12000(0.0425)(5)`
`I = 2550`

So, in `5` years at a rate of `4.25%`, `$12,000` will earn `$2,550` in interest.