Find the simple interest on a $2,000 investment made for 5 years at an interest rate of 5% per year. What is the future value ?
A)The simple interest is $500, the future value is $2,500.
B) The simple interest is $480, the future value is $2,500.
C) The simple interest is $530, the future value is $2,480.
D) The simple interest is $480, the future value is $2,480.
E) The simple interest is $490, the future value is $2,490.

Question

Find the simple interest on a $2,000 investment made for 5 years at an interest rate of 5% per year. What is the future value  ?
A)The simple interest is $500, the future value is $2,500.
B) The simple interest is $480, the future value is $2,500.
C) The simple interest is $530, the future value is $2,480.
D) The simple interest is $480, the future value is $2,480.
E) The simple interest is $490, the future value is $2,490.

Quizplus · Accepted Answer

Simple interest is calculated as $I = P \times r \times t$, where $P$ is the principal amount ($2000), $r$ is the annual interest rate (5% or 0.05), and $t$ is the time in years (5). Thus, $I = 2000 \times 0.05 \times 5 = $500$. The future value is the principal plus the interest, which is $2000 + $500 = $2500.

Find the Simple Interest on a $2,000 Investment Made for 5