The amount at the end of three years is 1.06 times the initial amount.
- Simple interest is calculated using the following formula: = P × R × T, where P = principal, R = annual interest rate (%), T = hours, usually calculated as years. The interest rate is expressed as a percentage r% and written as r/100.
- Principal : Principal is the amount originally borrowed or invested by the bank. The capital is represented by P.
- Interest Rate : The interest rate is the rate at which the principal is given to someone for a period of time. The interest rate could be 5%, 10%, or 13%. The interest rate is represented by R.
- Time : Time is the length of time a principal is given to someone. Time is represented by T.
- Amount : When a person takes out a loan from a bank, he has to repay the amount of principal plus interest, and this repayment amount is called the amount.
Rate = 2%
Time = 3 Years
Let the principal amount be P
Simple interest = P * R * T
SI = ( P * 2 * 3 ) / 100
= 6P/100
= 0.06P
Amount = P + SI
= P + 0.06P
= P(1 + 0.06)
= 1.06P
The amount at the end of three years is 1.06 times the initial amount.
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