ABC Bank pays 2% simple interest compounded annually on an investment of $10,000.What is the interest earned in the fifth year?
A) $2000
B) $200
C) $1000
D) $100
E) $500

Name: ABC Bank pays 2% simple interest compounded annually on an investment of $10,000.What is the interest earned in the fifth year? A) $2000 B) $200 C) $1000 D) $100 E) $500
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Question

Quizplus · Accepted Answer

Simple interest is calculated as Principal x Rate x Time. For the fifth year, the interest is $10,000 x 0.02 x 1 = $200.

ABC Bank Pays 2% Simple Interest Compounded Annually on an Investment