<PRE><B>Question 428025</B>
simple interest is not compounded interest.


it does not assume re-investment of the profits.


to find simple interest,  you multiply the principal by the interest rate to get the interest.


9000 * .05 = 450 interest.


multiply the interest by 2 to get 900 interest for the 2 years.


formula would be p * i * n


p is the principal (9000)
i is the interest rate (.05)
n is the number of years (2)


formula becomes 9000 * .05 * 2 = 900


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