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, you can use the formula for simple interest:

\[
I = P \times r \times t
\]

where:
- \( I \) is the interest earned,
- \( P \) is the principal amount (the initial investment),
- \( r \) is the rate of interest (as a decimal), and
- \( t \) is the time in years.

In this case:
- \( P = 1500 \) (the amount José put in the savings account),
- \( r = 0.03 \) (3% interest),
- \( t = 3 \) (the number of years).

Now plug in the values:

\[
I = 1500 \times 0.03 \times 3
\]
\[
I = 1500 \times 0.09
\]
\[
I = 135
\]

So, the simple interest José will earn at the end of 3 years is **$135.00**.

The correct answer is **B. $135.00**.