Armed Forces Classification Test (AFCT) Arithmetic Reasoning Practice Test 2025 - Free AFCT Practice Questions and Study Guide

Question: 1 / 400

If you invest $1,000 at an interest rate of 5% per year, how much interest will you earn after one year?

$40

$50

To determine how much interest will be earned after one year on an investment of $1,000 at an interest rate of 5%, you can use the formula for calculating simple interest, which is:

Interest = Principal x Rate x Time

In this case, the principal is $1,000, the rate is 5% (which can be expressed as 0.05 in decimal form), and the time is 1 year.

Now, substituting these values into the formula gives:

Interest = $1,000 x 0.05 x 1

Interest = $1,000 x 0.05

Interest = $50

Therefore, after one year, the interest earned on the investment will be $50, which corresponds to the correct choice. This understanding demonstrates how to compute interest on a simple investment over a specified period using basic arithmetic calculations.

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$60

$70

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