What is the simple interest on 1200 euros at 4 % per year over 2 years?
Answer and explanation
Correct answer: D. 96 euros
- Step 1: Interest = capital x rate x years / 100. Step 2. 1200 x 4 x 2 / 100 = 96 euros. Answer: 96 euros. Why not the others: 48 euros: interest for one year only. 97.92 euros: compound interest was used instead of simple interest. 1296 euros: this is the total amount, not the interest.
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