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?

Answer 1

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

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

where:
- \( P \) is the principal amount (the initial amount of money),
- \( r \) is the annual interest rate (in decimal),
- \( t \) is the time the money is invested for in years.

For José's savings account:
- \( P = 1500 \) (the initial amount),
- \( r = 3\% = 0.03 \) (the interest rate),
- \( t = 3 \) years.

Now we can substitute these values into the formula:

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

Calculating the interest:

\[
\text{Simple Interest} = 1500 \times 0.03 = 45
\]
\[
\text{Simple Interest} = 45 \times 3 = 135
\]

Therefore, the simple interest José will earn at the end of 3 years is **$135**.