5000 was deposited in an account at a rate of 5 per year If

$5000 was deposited in an account at a rate of 5% per year. If no money is deposited or withdrawn, how much interest will the account earn during the third year given the account earns simple interest?

Solution

Simple interest= PRT

Where, P is the principal amount which was deposited.

R is the rate of interest (in percentage).

T is the time period.

Here, P= $5000, R= 5 = 0.05 and T=3

So, simple interest = 5000*(0.05)*3 = $ 750

During the 3rd year the account will earn $750 simple interest.