What is the total amount after 2 years if $3,030 is invested at a 6% annual simple interest rate? Please write the answer in two decimal places.

Question

What is the total amount after 2 years if $3,030 is invested at a 6% annual simple interest rate?  Please write the answer in two decimal places.

BlackTom AI · Accepted Answer

The problem asks for the total amount after 2 years when a principal of $3,030 is invested at a 6% annual simple interest rate.

First, recall the simple interest formula: Interest = Principal × Rate × Time. Here, Principal = 3030, Rate = 0.06 (since 6%), Time = 2 years.

Compute the interest: 3030 × 0.06 × 2. 3030 × 0.06 = 181.8; multiplying by 2 gives 363.60.

Next, add the interest to the original principal to obtain the total amount: 3030 + 363.60 = 3393.60.

Finally, format the result to two decimal places as requested: 3393.60.

Common pitfalls to avoid: forgetting to convert the percentage to a decimal (6% as 0.06), or misapplying the time factor (2 years) in the interest calculation. Also, ensure you add the earned interest back to the principal, not just report the interest amount separately, to get the total value after the period.

25400 Financial Literacy - Spring 2025 🔴 Practice Questions for In-class Quiz 1

What is the total amount after 2 years if $3,030 is invested at a 6% annual simple interest rate? Please write the answer in two decimal places.

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