Charis invested $140

. She earned a simple interest of 3%
per year on the initial investment. If no money was added or removed from the investment, what was the amount of interest Charis received at the end of two years?
A
$4.20
B
$6.00
C
$8.40
D
$12.60

1 answer

To calculate the simple interest earned by Charis over two years, you can use the formula for simple interest:

\[ \text{Interest} = P \times r \times t \]

where:

  • \( P \) is the principal amount (initial investment),
  • \( r \) is the annual interest rate (as a decimal),
  • \( t \) is the time in years.

Given:

  • \( P = 140 \) dollars,
  • \( r = 3% = 0.03 \),
  • \( t = 2 \) years.

Now plug in the values:

\[ \text{Interest} = 140 \times 0.03 \times 2 \]

Calculating this step-by-step:

  1. Calculate \( 0.03 \times 2 = 0.06 \).
  2. Then multiply \( 140 \times 0.06 = 8.40 \).

So, the amount of interest Charis received at the end of two years is:

\[ \text{Interest} = 8.40 \text{ dollars} \]

The correct answer is:

C) $8.40