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, 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.