Multiple choice

A certain bank pays simple interest on saving accounts at the rate of 6% per annum. If a man has $7,200 in deposit, then find the interest earned after 1 year.

  1. $432
  2. $392
  3. $296
  4. $178
  5. $142
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A Correct answer
Explanation

Simple interest = Principal * Rate * Time / 100. SI = 7200 * 6 * 1 / 100 = 72 * 6 = 432.

AI explanation

Using the simple interest formula SI = (P * R * T) / 100, substitute the given values to find the interest earned after 1 year. The calculation is SI = (7200 * 6 * 1) / 100, which equals $432.