Answer:
Annual interest is, $80.50
Step-by-step explanation:
Simple interest defined as it is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments i.e,
[tex]I = \frac{P \times R \times T}{100}[/tex] where
I represents the simple interest
P represents the principal
R represents the rate
T represents the time in year.
Given: P = $3500 , R = 2.3% and T = 5 years.
Using simple interest formula to calculate Interest;
[tex]I = \frac{3500 \times 2.3 \times 5}{100} =\frac{3500 \times 11.5}{100}[/tex]
Simplify:
[tex]I = \$402.50[/tex]
Therefore, Annual interest = [tex]\frac{402.50}{5} = \$80.50[/tex]
