bartleby
search
close search
Hit Return to see all results

Fred invested $25,000 at 4% simple interest. How much interest will he earn each year?

Question

Fred invested $25,000 at 4% simple interest. How much interest will he earn each year?

check_circleAnswer
Step 1

Simple interest:

Simple interest is an easy method of calculating the interest charge on a loan. Simple interest will not give an interest on the interest. The interest payments will be fixed to the simple interest amount per year no matter how many years the initial sum of money stays in the bank or with the barrower.

The general formula for simple interest is,

I = P * r * t

Where:

P is the principle amount,

r is the interest rate,

t is the time period.

There’s more to the solution above. Sign up now to see!

Sign Up

Not ready to register yet? Check out a sample Q&A here.

Stuck on your homework?

Get expertly curated answers to your homework questions for just $9.99/month

Get As ASAP
Tagged in

Math

Algebra

Other

Sorry about that. What wasn’t helpful?