Question 1026990
simple interest formula ia:


i = p * r * n


i = interest
p = principal 
r = rate of interest per time period
n = number of time periods


man invests 1800
after 2 years he has 1980


his interest earned is 1980 - 1800 = 180.


you get:


p = 1800
i = 180
n = 2



formula of i = p * r * n becomes:


180 = 1800 * r * 2


solve for r to get r = 180 / 1800 / 2 = .05


his interest rate is .05 per year.


that's 5% per year.


at 5% interest per year, he makes 1800 * .05 = 90 interest each year.


in 2 years that becomes 180.


with simple interest, you are only earning interest on the original principal each other.


this gives you the same amount of interest each year.