Ravi deposits $500 into an account that pays simple interest at a rate of 4% per year. How much interest will he be paid in the first 4 years?
The formula for interest using simple interest is:
I = Prt where P = Principal, r = interest, and t = time.
We're given P = 500, r =0.04, and t = 4. So we plug this in and get:
I = 500(0.04)(4)
I = 80
The formula for interest using simple interest is:
I = Prt where P = Principal, r = interest, and t = time.
We're given P = 500, r =0.04, and t = 4. So we plug this in and get:
I = 500(0.04)(4)
I = 80