To get the interest after 5 years, use the formula for simple interest which is I = Prt.
Where the meaning of the variables are:
I = interest
P = principal
r = interest rate
t = time
So in the problem,
P = $4,000
r = 0.06 or 6/100 or 6% (but is usually expressed in decimal form)
t = 5 years
Plug those in the formula.
I = Prt= ($4,000) (0.06) (5 years)
= (240) (5)
= $1,200
After 5 years, Alfred will get $1,200 if he invest the $4,000 at 6 percent.
