Question

Trey deposits $400 into an account that pays simple interest at a rate of 5% per year. How much interest will he be paid in the first 4 years?

Answer 1

I = prt

I = 400(.05)(4)

I = 1600(.05)

I = 80.00

Answer 2

simple interest is just interest generated by the principle amount and not any added cumulative build up of interest..