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

Answer:

Option (a) is correct.

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

Step-by-step 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,

$SI=\frac{P \times r\times t}{100}$

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 = $\frac{120}{365}$ year.

Substitute, we get,

$SI=\frac{P \times r\times t}{100}$

$SI=\frac{5000 \times 8.5\times 120}{100\times 365}$

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

Answer 2

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