The formula of the Simple Interest is:
I=PRT
P for Principle Amount ($1200)
R for Rate (5%=[tex] \frac{5}{100} [/tex] = 0.05)
T for Time in years (4 years)
I = 1200 × 0.05 × 4
= $240
Add the interest to the principle amount to check the balance
$1200 + $240 = $1440
