Multiple choice

A sum of $5100 is deposited in a bank for 4 months at an simple interest rate of 5% per annum. How much is the interest earned?

  1. $72
  2. $75
  3. $80
  4. $85
  5. $95
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D Correct answer
Explanation

Using the simple interest formula I = P * R * T, where P = 5100, R = 0.05, and T = 4/12 = 1/3 year, we get I = 5100 * 0.05 * (1/3) = $85.

AI explanation

Using the simple interest formula of Principal times Rate times Time divided by 100, the time is 4 months, so it becomes 4 divided by 12 years. The interest is 5100 times 5 times 4 divided by 1200, which simplifies to 5100 divided by 60, resulting in 85.

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