What simple interest is earned on \(\$500\) at an annual rate of \(6\%\) for \(2~\text{years}\)?
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Simple interest keeps the principal unchanged, so the structure is principal times annual rate times time in years. We’ll convert six percent to a decimal, substitute five hundred dollars and two years, and calculate the interest earned across both years. The prompt asks for interest only, so the principal should not be added afterward.
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