Simple interest, step by step
Interest is just a percent of a sum, taken once a year.
The question
$4725 earns 12% simple interest a year. How much interest after 2 years?
$4725 earns 12% simple interest a year.
4725÷ 100 =47.25
47.25×12=567
567×2=1134
- Find one percent of $4725 first: 4725 ÷ 100 = 47.25.
- 12% is 12 of those, so one year's interest is 47.25 × 12 = $567.
- It runs for 2 years, so multiply: 567 × 2 = $1134.
How it works.
- 01
Find one percent of $4725 first: 4725 ÷ 100 = 47.25.
- 02
12% is 12 of those, so one year's interest is 47.25 × 12 = $567.
- 03
It runs for 2 years, so multiply: 567 × 2 = $1134.