Lamar deposits $600 into an account that pays simple interest at a rate of 2% per year. How much interest will he be paid in the first 3 years?$
Solution
To calculate the simple interest, we can use the formula:
Interest = Principal * Rate * Time
where:
- Principal is the initial amount of money that was deposited or loaned. In this case, it's $600.
- Rate is the annual interest rate. Here, it's 2% or 0.02 in decimal form.
- Time is the length of time the money is deposited or borrowed for, in years. Here, it's 3 years.
Substituting these values into the formula, we get:
Interest = $600 * 0.02 * 3
So, the interest Lamar will be paid in the first 3 years is $36.
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