Given a principal of $100 and a rate of 10%, match the number of years to the amount of interest earned using simple interest.
1 year
2 years
3 years
$20
$10
Answer (1)
Calculate the simple interest for 1 year: $100 * 0.10 * 1 = $10.
Calculate the simple interest for 2 years: $100 * 0.10 * 2 = $20.
Calculate the simple interest for 3 years: $100 * 0.10 * 3 = $30.
Match the years to the interest earned: 1 year = $10, 2 years = $20, 3 years = 30. T h e an s w er i s 1 ye a r : \boxed{$10} an d 2 ye a rs : \boxed{$20}$.
Explanation
Understanding the Problem We are given a principal amount of $100 and an interest rate of 10%. We need to calculate the simple interest earned for 1, 2, and 3 years and match the number of years to the corresponding interest amount.
Simple Interest Formula The formula for simple interest is: S im pl e I n t eres t = P r in c i p a l × R a t e × T im e Where:
Principal is the initial amount of money.
Rate is the interest rate (as a decimal).
Time is the number of years.
Calculating Interest for 1 Year For 1 year: S im pl e I n t eres t = $100 × 0.10 × 1 = $10 So, the simple interest earned for 1 year is $10.
Calculating Interest for 2 Years For 2 years: S im pl e I n t eres t = $100 × 0.10 × 2 = $20 So, the simple interest earned for 2 years is $20.
Calculating Interest for 3 Years For 3 years: S im pl e I n t eres t = $100 × 0.10 × 3 = $30 So, the simple interest earned for 3 years is $30.
Matching Years to Interest Matching the number of years to the interest earned:
1 year: $10
2 years: $20
3 years: $30
Examples
Simple interest is a fundamental concept in finance and is used in many real-life situations. For example, when you deposit money in a savings account, the bank might pay you simple interest on your deposit. Understanding how simple interest works helps you calculate the returns on your investments and make informed financial decisions. Another example is short-term loans, where simple interest is often used to calculate the interest owed.
