Suppose you invested $5,000. You earned a simple interest of 4% per year on your initial investment. What was the amount of interest earned at the end of the year?
Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy
Learn about the basics of compound interest, with examples of basic compound interest calculations. Created by Sal Khan. Watch the next lesson: ...
Answer
Suppose you invested $5,000 that means your initial investment is $5,000.
You earned a simple interest of 4% per year that means that you gain 4% from $5,000 in a year.
the amount of interest earned at the end of the year:
5000 x 4% = 5000 x 4/100 = 5000 x 0.04 = 50 x 4 = 200$
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