Question

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

Answer 1

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**.