José put $1,500 into a savings account.  He earns 3% interest every year.  How much simple interest will he earn at the end of 3 years?

A. 

$45.00

B. 

$135.00

C. 

$4,500.00

D. 

$13,500.00

1 answer

To calculate the simple interest earned, we can use the formula for simple interest:

\[ \text{Interest} = P \times r \times t \]

where:

  • \( P \) = principal amount (the initial amount of money)
  • \( r \) = annual interest rate (in decimal form)
  • \( t \) = time the money is invested or borrowed for, in years

In this case:

  • \( P = 1500 \)
  • \( r = 0.03 \) (3% expressed as a decimal)
  • \( t = 3 \)

Now, plug in the values:

\[ \text{Interest} = 1500 \times 0.03 \times 3 \]

Calculating this step by step:

  1. Multiply \( 1500 \times 0.03 = 45 \)
  2. Now multiply \( 45 \times 3 = 135 \)

Thus, the simple interest earned at the end of 3 years is:

\[ \text{Interest} = 135 \]

Therefore, the correct answer is B. $135.00.