Question

Mark lent $5,200.00 at a simple interest rate of 3.00% p.a. on March 15, 2014. Calculate the amount of interest he would receive on July 24, 2014.

Select the correct answer. No work needs to be shown.
$55.99
$20,436.00
$1,703.00
$5,255.99

Answer 1

The simple interest for a loan of $5,200 at a 3.00% annual rate for the period from March 15, 2014, to July 24, 2014, is approximately $55.10, with the closest answer choice being $55.99.

Step-by-step explanation:

To calculate the simple interest that Mark would receive on his loan of $5,200.00 at an interest rate of 3.00% per annum, we need to use the formula for simple interest, which is:

I = P × r × t

Where:

• I is the interest
• P is the principal amount ($5,200)
• r is the annual interest rate (3.00%, or 0.03 as a decimal)
• t is the time period in years

First, we need to determine the time period in years from March 15, 2014, until July 24, 2014. This is approximately 4 months and 9 days.

To convert this to years, we need to divide the total number of days by 365.

Approximate days in 4 months and 9 days: 129 days
Total time in years:

129/365 ≈ 0.3534 years

Now we can insert the values into the formula:

I = $5,200 × 0.03 × 0.3534 ≈ $55.10

The nearest choice to the calculated interest is $55.99, so we select this as the correct answer.