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How much interest is earned in 2 years on $13,006 invested at an interest rate of 5% per year?

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1 Answer

Hello Amanda,
 
Since this problem doesn't say anything about compound interest, we can assume this is a simple interest problem. The equation for simple interest is:
 
I = Prt
 
where our interest I is the principle amount P times the rate r multiplied by time t.
 
I = 13006 * 0.05 * 2
 
I = 1300.6