Sipho saves R300 and earns 6% simple interest per year. Calculate the interest earned after 1 year. (4 marks)

1 answer

To calculate the interest earned after 1 year using simple interest, you can use the formula:

\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]

Where:

  • Principal (P) = R300
  • Rate (R) = 6% per year = 0.06 (as a decimal)
  • Time (T) = 1 year

Now, substituting these values into the formula:

\[ \text{Interest} = R300 \times 0.06 \times 1 \]

Calculating this gives:

\[ \text{Interest} = R300 \times 0.06 = R18 \]

Thus, the interest earned after 1 year is R18.