Question

Sophiahas$40,000inasavingsaccountthatearns14%interestperyear.Theinterestisnotcompounded.Howmuchinterestwillsheearnin3years?

Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years

Answer 1

Use i = prt.

p = 40,000, r = 14% = 0.14, t = 3.

i = 40,000 × 0.14 × 3 = 40,000 × 0.42 = 16,800.

Sophia will earn $16,800 in interest in 3 years.