If you invest $1,000 at simple interest rate 6% per year for 3 years, what is the interest earned?

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Multiple Choice

If you invest $1,000 at simple interest rate 6% per year for 3 years, what is the interest earned?

Explanation:
Understanding simple interest means multiplying the principal by the annual rate (as a decimal) and by the time in years. Here, 1,000 × 0.06 × 3 = 60 × 3 = 180, so the interest earned over three years is $180. Since this uses simple interest, there’s no interest-on-interest effect. Therefore, the correct amount is $180.

Understanding simple interest means multiplying the principal by the annual rate (as a decimal) and by the time in years. Here, 1,000 × 0.06 × 3 = 60 × 3 = 180, so the interest earned over three years is $180. Since this uses simple interest, there’s no interest-on-interest effect. Therefore, the correct amount is $180.

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