Multiple choice

Sarah, an investment banker, decided to lend a sum of money to a friend who wanted to open a small café. They agreed on an annual simple interest rate of 5%. Sarah lent her friend $15,000. If the interest accrued for a specific period was to be calculated from March 1, 2023, to June 15, 2023, approximately how much simple interest would Sarah earn for that period?

  1. $150
  2. $180
  3. $220
  4. $250
  5. $300
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Time period: March (31-1) + April (30) + May (31) + June (15) = 30 + 30 + 31 + 15 = 106 days. Simple Interest = (P * R * T) / 100 = (15000 * 0.05 * 106) / 365 = 750 * 106 / 365 = 79500 / 365 = 217.80. This rounds to approximately $220.

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