Question

1. calculate the simple interest earned on an account starting with the principal stated below and paying the specified annual rate of interest for the time stated. round to the nearest dollar. principal = $16,000, rate = 3%, time = 5 years

a $2,548
b $6,400
c $2,400
d $2,672

Explanation:

Step1: Recall simple interest formula

The formula for simple interest is $I = P \times r \times t$, where $I$ is the interest, $P$ is the principal, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years.

Step2: Convert rate to decimal

The annual rate is 3%, so in decimal form, $r = \frac{3}{100} = 0.03$.

Step3: Substitute values into formula

We have $P = 16000$, $r = 0.03$, and $t = 5$. Substituting these into the formula: $I = 16000 \times 0.03 \times 5$.
First, calculate $16000 \times 0.03 = 480$. Then, calculate $480 \times 5 = 2400$.

Answer:

c. $2,400$