alleryStart learning →Areli invested a principal of $950 at a 3% interest rate. How much simple interest did she earn in 5 years?
A$28.50
B$142.50
C$475.00
D$47.50
Answer & Solution
Correct answer: B. $142.50
1. Use the simple interest formula I = Prt.
2. Substitute the given values: I = 950 times 0.03 times 5.
3. Multiply: 950 times 0.03 is 28.50, and 28.50 times 5 equals 142.50.
4. Areli earned $142.50 in interest; $28.50 is only one year of interest, the trap for dropping the time.
_Source: OpenStax Elementary Algebra (CC BY 4.0), Ch 3 "Math Models", section 3.2 Solve Percent Applications_
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