Question

The simple interest rate of a certain bank on deposits is 5 % each year. If the starting balance is $100, find the simple interest accrued at the end of 5 years.
$11
$15
$25
$17

Answer 1

To calculate the simple interest accrued over a period of time, you 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 rate of interest (in decimal form),
- \( t \) is the time (in years).

In this case:
- \( P = 100 \, \text{dollars} \)
- \( r = 5\% = \frac{5}{100} = 0.05 \)
- \( t = 5 \, \text{years} \)

Now, plug the values into the formula:

\[
\text{Simple Interest} = 100 \times 0.05 \times 5
\]

Calculating:

\[
\text{Simple Interest} = 100 \times 0.05 = 5
\]
\[
5 \times 5 = 25
\]

So, the simple interest accrued at the end of 5 years is **$25**.

Thus, the answer is **$25**.