The Principal Interest Rate $12,000, interest rate 4.25%, and Time 5 years, what is the simple interest?

1 Answer
Nov 8, 2016

Answer:

After #5# years at a rate of #4.25%#, #$12,000# will earn #$2,550# interest.

Explanation:

The formula for finding simple interest is

#I = prt#

where #I# is the interest earned, #p# is the principal, #r# is the interest rate expressed as a decimal, and #t# is the time of the investment expressed in years.

For the information given and requested, fill in the values in the appropriate positions and multiply. Remember that #4.25% = 0.0425# as a decimal.

#I = 12000(0.0425)(5)#
#I = 2550#

So, in #5# years at a rate of #4.25%#, #$12,000# will earn #$2,550# in interest.