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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.
a. $55.99
b. $20,436.00
c. $1,703.00
d. $5,255.99

User Tim Banks
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1 Answer

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Final answer:

To calculate the simple interest on a loan of $5,200 at 3.00% from March 15, 2014, to July 24, 2014, we determine the time period in years and apply the simple interest formula. This results in an interest amount of approximately $55.10, making option (a) $55.99 the correct answer.

Step-by-step explanation:

The question is asking to calculate the simple interest earned on a loan of $5,200 at an interest rate of 3.00% per annum, from March 15, 2014, to July 24, 2014. To find the interest, we use the formula I = PRT, where:

  • P is the principal amount ($5,200)
  • R is the annual interest rate (3% or 0.03)
  • T is the time duration in years

First, we need to calculate T, which is the time in years from March 15 to July 24. This time period is 4 months and 9 days. Assuming each month has 30 days for simplicity, that's equivalent to 4 * 30 + 9 = 129 days. There are 365 days in a non-leap year, so:

T = 129/365 = 0.3534 years (approximately)

Now, we can calculate the interest:

I = $5,200 × 0.03 × 0.3534 = $55.10 (approximately)

Mark would receive approximately $55.10 in interest by July 24, 2014. Therefore, the correct answer is (a) $55.99, which is a slight approximation from the calculated interest.

User Bwroga
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