Question

1. calculate the simple interest earned on an account that starts with the principal listed below and pays the stated annual interest rate over the given time period. round to the nearest dollar. principal = $12,000, rate = 4%, time = 2 years

a $594
b $979
c $760
d $960

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

Given the rate is $4\%$, we convert it to a decimal by dividing by 100: $r = \frac{4}{100} = 0.04$.

Step3: Substitute values into formula

We know $P = \$12,000$, $r = 0.04$, and $t = 2$ years. Substituting these into the formula: $I = 12000 \times 0.04 \times 2$.

Step4: Calculate the interest

First, calculate $12000 \times 0.04 = 480$. Then, multiply by 2: $480 \times 2 = 960$.

Answer:

d. $960$