Calculate the amount of simple interest earned. $5,000 at 8% for 4 years
A) $20,000
B) $1,600
C) $400
D) $16,000
E) $32,000

Question

Quizplus · Accepted Answer

To calculate simple interest, use the formula I = PRT, where I is the interest, P is the principal (the initial amount of money), R is the interest rate, and T is the time (in years). Plugging in the given values, we get I = (5000)(0.08)(4) = $1600. Therefore, the correct answer is B).

Calculate the Amount of Simple Interest Earned