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The simple interest on $600 for 1 year at 5% per annum is $120. The value of 1₁ is?

A. $480
B. $540
C. $600
D. $720

User Van Amburg
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1 Answer

4 votes

Final answer:

The value of 1 unit of currency is $1.

Step-by-step explanation:

To find the value of $1, we need to determine how much $600 will grow to in 1 year with a simple interest rate of 5% per annum, which is $120. We can use the formula for simple interest: I = P * r * t, where I is the interest, P is the principal amount (initial deposit), r is the interest rate, and t is the time period in years.

So, in this case, we have $120 = $600 * 0.05 * 1. Now, let's solve for $1: $1 = $120 / ($600 * 0.05 * 1) = $1.

Therefore, the value of 1 unit of currency in this scenario is $1.

User Evelin Amorim
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