I = $ 400.00
Equation:
I = Prt
Calculation:
First, converting R percent to r a decimal
r = R/100 = 4%/100 = 0.04 per year,
then, solving our equation
I = 5000 × 0.04 × 2 = 400
I = $ 400.00
The simple interest accumulated
on a principal of $ 5,000.00
at a rate of 4% per year
for 2 years is $ 400.00.
