Calculation:
First, converting R percent to r a decimal
r = R/100 = 5%/100 = 0.05 per year,
then, solving our equation
I = 20 × 0.05 × 2 = 2
I = $ 2.00
The simple interest accumulated
on a principal of $ 20.00
at a rate of 5% per year
for 2 years is $ 2.00.
