R1 000 is invested for 2 years at 20% simple interest per year. How much interest is earned?
Answer and explanation
Correct answer: C. R400
- Step 1: Simple interest = P × i × n.
- Step 2: R1 000 × 0,2 × 2 = R400.
Answer
R400.
Why not the others: R440: compound interest was used instead of simple interest. R200: interest for one year only. R1 400: this is the total amount, not the interest.
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