What is the simple interest earned on $1,200 at 4% interest rate for 2 years?

Master the NLN PAX Mathematics 1 Exam with our comprehensive study guide and quizzes. Test your knowledge with multiple choice questions tailored for the PAX Math exam, featuring detailed explanations and tips to enhance your preparation and increase your chances of success.

Multiple Choice

What is the simple interest earned on $1,200 at 4% interest rate for 2 years?

Explanation:
This question uses the simple interest formula I = P × r × t. Convert the percentage to a decimal: r = 0.04. With P = 1200 and t = 2, the interest is I = 1200 × 0.04 × 2 = 1200 × 0.08 = 96. So the simple interest earned is $96. Quick check: 4% of 1200 is 48 per year, and for 2 years that’s 96.

This question uses the simple interest formula I = P × r × t. Convert the percentage to a decimal: r = 0.04. With P = 1200 and t = 2, the interest is I = 1200 × 0.04 × 2 = 1200 × 0.08 = 96. So the simple interest earned is $96. Quick check: 4% of 1200 is 48 per year, and for 2 years that’s 96.

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