Given a bond with a principal of $10,000 , an annual interest rate of 5% , and a term of 3 years, what is the total interest earned? Simple interest formula I=P⋅r⋅t
Answer
A
500 dollars
B
1 dollars comma 500
C
2 dollars comma 000
D
1 dollars comma 000
Explanation
Using the simple interest formula, I = P × r × t = $10,000 × 0.05 × 3 = $1,500. The total interest earned is $1,500, which is choice C.
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