Multiple choice

If an investment yields an interest amount of $117 in five months and the simple annual interest rate is 9%, then what is the amount of the investment?

  1. $2,500
  2. $2,550
  3. $3,120
  4. $3,200
  5. $3,500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest I = P * R * T. Here I = 117, R = 0.09 per year, T = 5/12 years. 117 = P * 0.09 * (5/12). 117 = P * (0.45 / 12) = P * 0.0375. P = 117 / 0.0375 = 3120.

AI explanation

The formula for principal using simple interest is P = (100 * Interest) / (Rate * Time). Substituting the given values gives P = (100 * 117) / (9 * 5 divided by 12). This simplifies to P = 11700 divided by 3.75, which makes the original investment $3,120.

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