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Question

Difficulty: EasySimple Interest

A customer deposits $3,000\$3,000 into a savings account that pays an annual simple interest rate of 6%6\%. If no additional deposits or withdrawals are made, how much total interest will the account earn after 22 years?

  1. A
    \$36
  2. B
    \$180
  3. \$360Answer
  4. D
    \$3,600

Answer

The account will earn $360\$360 in total interest.
The formula for simple interest is I=P×R×TI = P \times R \times T, where PP is the principal, RR is the annual interest rate as a decimal, and TT is the time in years. Substituting the given values: I=$3,000×0.06×2=$360I = \$3,000 \times 0.06 \times 2 = \$360.

Step-by-Step Solution

1
Identify the given values for principal, rate, and time.
P=$3,000P = \$3,000, R=6%=0.06R = 6\% = 0.06, T=2T = 2 years.
These are the necessary components for the simple interest formula.
2
Apply the simple interest formula I=P×R×TI = P \times R \times T.
I=$3,000×0.06×2I = \$3,000 \times 0.06 \times 2
This formula calculates the total interest earned over the given time period.
3
Multiply the values to find the total interest.
I=$360I = \$360
This provides the final amount of interest earned.

Key Concept

Simple Interest
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Topics

Simple Interest

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