Question

If ​$23,000 is invested for 1 yr at 2​% simple​ interest, how much interest is​ earned?

Answer 1

To calculate the interest earned on an investment with simple interest, you can use the formula:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

Where:
- Principal = amount invested (in this case, $23,000)
- Rate = annual interest rate (2% or 0.02)
- Time = duration of the investment in years (1 year)

Now, substituting the values into the formula:

\[
\text{Interest} = 23000 \times 0.02 \times 1
\]

Calculating this:

\[
\text{Interest} = 23000 \times 0.02 = 460
\]

Thus, the interest earned is **$460**.