The total amount of simple interest calculated annually on a $4,000 note payable in five years at 9% is
A)$1,800.00.
B)$1,411.20.
C)$2,154.60.
D)$554.04.

Question

Quizplus · Accepted Answer

Simple interest is calculated using the formula I = PRT, where I is the interest, P is the principal amount ($4,000), R is the rate (9% or 0.09), and T is the time in years (5). Thus, I = $4,000 * 0.09 * 5 = $1,800.00.

The Total Amount of Simple Interest Calculated Annually on a $4,000