Question

Compute the amount of interest earned in the following simple interest problem. A deposit of $5,000 at 8.5% for 120 days = _____.

$140.25
$1,402.50
$14,025
$51,000

Answer 1

I = p * r * t
I = 5000 * .085 * (1/3)
I = 140.25

Answer 2

Option (a) is correct.

The amount of interest earned in the given simple interest problem is $140.25

Explanation:

Given : A deposit of $5,000 at 8.5% for 120 days.

We have to calculate the amount of interest earned in the given simple interest problem.

Using Simple interest formula,

`SI=(P * r* t)/(100)`

Where SI denotes simple interest

P denotes principal

R denotes rate of interest

t denotes time period.

Thus,

Given : P = $5,000

r= 8.5%

t = 120 days

1 year = 365 days.

So , 120 days =
`(120)/(365)` year.

Substitute, we get,

`SI=(P * r* t)/(100)`

`SI=(5000 * 8.5* 120)/(100* 365)`

On simplify, we get,

SI =$ 139.72

Thus, out of given options nearest value is $140.25 (approx)

Thus, the amount of interest earned in the given simple interest problem is $140.25