Multiple choice

A sum of money was invested at simple interest for 4 years at an annual rate of 5%. The total interest earned was \$360. Quantity A The amount invested Quantity B \$1,200

  1. Quantity A is greater.

  2. Quantity B is greater.

  3. The two quantities are equal.

  4. The relationship cannot be determined from the information given.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Simple interest formula is I = P * r * t. Given I = 360, r = 0.05, and t = 4, we have 360 = P * 0.05 * 4, which is 360 = P * 0.20. Thus P = 360 / 0.20 = 1800. Since 1800 > 1200, Quantity A is greater.

AI explanation

Using the simple interest formula of principal times rate times time divided by 100, the principal is 100 times interest divided by (rate times time). Substituting the values gives 100 times 360 divided by (5 times 4), which equals 36000 divided by 20. The amount invested is 1800. Since 1800 is greater than 1200, Quantity A is greater.

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