You deposit $2000 into an account that earns interest at the rate of 5% per year. How much interest is obtained over 5 years?
We know Simple Interest (
Where P = Principal amount, R = Rate of interest and. T = Time.
Here P = 2000, I = 5 and T = 5.
The annual interest is distributed over each payment cycle.
For monthly calculation cycle we do have
Interest per year
Interest for 5 years