Subject:  Finite Math

Simple interest on $1000 at 5% for 3 years

Find the interest and final amount with the I = Prt formula.

Answer I = 150.00, A = 1150.00

Solution

  1. Principal P = 1000.00
  2. Rate r = 5% = 0.05 per period
  3. Time t = 3 periods
  4. Formula I = P · r · t, A = P + I
  5. Interest I = 1000.00 · 0.05 · 3 = 150.00
  6. Final amount A = 1000.00 + 150.00 = 1150.00

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