ACT WorkKeys – Workplace Documents, Applied Math, Graphic Literacy Practice Test

A $2000 loan at 6% simple interest for 1 year. What is the interest earned?

60 120 0 240

Correct Answer:

120

Explanation:

Simple interest is found by multiplying the principal by the interest rate and the time. Here, the principal is 2000 dollars, the rate is 6% per year, and the time is 1 year. Convert 6% to a decimal (0.06), then compute: 2000 × 0.06 × 1 = 120. So the interest earned is 120 dollars.

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