Answer: He will earn $75 after 3 years.
Explanation: To calculate Simple Interest, we use the formula:
[tex]i=\frac{PRt}{100}[/tex] .....(1)
where, i = Simple Interest
P = Principle amount
R = Rate of interest
t = Time period
Given:
P = $500
R = 5%
t = semiannually which means [tex]\frac{1}{2}[/tex] years
As we are asked the total amount earned after 3 years which means 6 half years, so we multiply the interest calculated semiannually by 6 to get the total interest after 3 years.
Putting all the values in equation 1, we get
[tex]i=\left(\frac{500\times 5\times 1}{100\times 2}\right )\times 6[/tex]
i = $75
Total amount earned after 3 years = i = $75
= $75
