What is the simple interest earned on $100 at 5% for 2 years?

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Multiple Choice

What is the simple interest earned on $100 at 5% for 2 years?

Explanation:
Interest from simple interest is found by multiplying the principal by the annual rate and the time: I = P × r × t. Here P is 100 dollars, r is 0.05 (5%), and t is 2 years. So I = 100 × 0.05 × 2 = 10 dollars. At a 5% rate, you earn 5 dollars each year on 100, for two years totaling 10. Since this is simple interest, there’s no additional interest on the interest.

Interest from simple interest is found by multiplying the principal by the annual rate and the time: I = P × r × t. Here P is 100 dollars, r is 0.05 (5%), and t is 2 years. So I = 100 × 0.05 × 2 = 10 dollars. At a 5% rate, you earn 5 dollars each year on 100, for two years totaling 10. Since this is simple interest, there’s no additional interest on the interest.

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