Ms. Drake will earn [tex]\$ 170[/tex] in this time from the investment of [tex]\$ 1000[/tex] at a simple interest with rate of interest [tex]8.5\%[/tex]
Simple interest is a way to figure out how much interest will be charged on a sum of money at a specific rate and for a specific duration of time. Conversely, for compound interest, where we add the interest of one year's principal to the next year's principal to compute interest, the principal amount under simple interest remains constant.
Formula for finding simple interest is [tex]\frac{principal \times rate \ of \ interest \times time}{100}[/tex]
Given principal of Ms. Drake is [tex]\$1000[/tex]
Rate of interest is [tex]8.5 \%[/tex]
Time is [tex]2[/tex] years.
Interest [tex]=\frac{1000 \times 8.5 \times 2}{100}[/tex]
[tex]=\frac{17000}{100}\\=170[/tex]
Therefore, Ms. Drake will earn [tex]\$ 170[/tex] in this time.
To learn more about simple interest from the given link
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