Question

The simple interest earned on a deposit of $4,000 at 5% for 120 days.

A. $24.00
B. $66.67
C. $240.00
D. $666.67

Answer 1

B. I=PRT is the simple interest formula. 120 days is 4 months, or 1/3 of a year.
I=(4,000)(0.05)(0.33333)
I=$66.67

Answer 2

Option B
`\$66.67`

Explanation:

we know that

The simple interest formula is equal to

`I=Prt`

where

P is the Principal amount of money to be invested

r is the rate of interest in decimal form

t is Number of Time Periods in years

in this problem

we assume that

`1\ month=30\ days`

`t=120\ days=(1/3)\ years\\ P=\$4,000\\r=0.05`

substitute in the formula above

`I=\$4,000*0.05*(1/3)=\$66.67`