What is the simple interest earned on $250 at 4% for 1 year?

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Multiple Choice

What is the simple interest earned on $250 at 4% for 1 year?

Explanation:
Simple interest is found by multiplying the principal by the annual rate and the time in years: I = P × r × t. Here P = 250, r = 0.04, t = 1, so I = 250 × 0.04 × 1 = 10. That means $10 of interest is earned in one year. You can also see 4% of 250 is 10 (since 1% of 250 is 2.50, and four percent is four times that).

Simple interest is found by multiplying the principal by the annual rate and the time in years: I = P × r × t. Here P = 250, r = 0.04, t = 1, so I = 250 × 0.04 × 1 = 10. That means $10 of interest is earned in one year. You can also see 4% of 250 is 10 (since 1% of 250 is 2.50, and four percent is four times that).

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