Question

An $86,000 investment earned a 4.0% rate of simple interest from December 2, 2019, to May 18, 2020. How much interest was

earned? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Interest earned

Answer 1

The interest earned on an $86,000 investment with a 4.0% rate of simple interest over a period of time can be calculated using the formula Interest = Principal × Rate × Time. The interest earned in this case is $1,290.

Step-by-step explanation:

The interest earned can be calculated using the formula:

Interest = Principal × Rate × Time

Given that the principal is $86,000 and the rate is 4.0%, and converting the time from December 2, 2019, to May 18, 2020, which is approximately 5 and a half months or 4.5/12 years, we can substitute the values into the formula:

Interest = $86,000 × 0.04 × (4.5/12) = $1,290.

Therefore, the interest earned is $1,290.