John deposited $1000 in a bank account that offers a simple interest rate of 5% per annum. How much interest will he earn after 2 years?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. $100.
We know that,
S.I. = (P × R × T)/100
here, S.I. = Simple Interest, P = principal, R = Rate, and T = Time
Now,
⇒ S.I. = (1000 × 5 × 2)/100
⇒ S.I. = 100
Hence, the interest earned after 2 years will be $100