Calculate the amount of interest if $700.00 is invested at 5.5% for two years and nine months.
A) $111.65
B) $105.88
C) $10 587.50
D) $1058.75
E) $158.65

Question

Quizplus · Accepted Answer

First of all, we need to convert the 2 years and 9 months into years. There are 12 months in a year, so:

2 years and 9 months = 2 + 9/12 = 2.75 years

Next, we use the simple interest formula to calculate the interest:

I = P*r*t

where I is the interest, P is the principal or initial amount, r is the interest rate as a decimal, and t is the time in years.

Plugging in the values we get:

I = 700*0.055*2.75 = $105.88

Therefore, the answer is B, $105.88, as that is the only option that matches our calculated interest amount.

Calculate the Amount of Interest If $700