What is the simple interest earned on a deposit of $4,000 at 5% for 120 days?

Solution:

Given, amount deposited is $4,000

Rate of interest is 5%

Time period is 120 days.

We have to find the simple interest.

We know, 1 month = 30 days

120 days = 3 months

1 year = 12 months

So, 120 days = 1/3 years

Simple interest = Prt/100

Where, P is the amount deposited

r is the rate of interest

t is the number of time periods in years.

So, simple interest = 4000 × 5 × (1/3) / 100

= 4000 × 5 / 300

= 20000/300

= 200/3

= 66.6667

Therefore, the simple interest is $66.67

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What is the simple interest earned on a deposit of $4,000 at 5% for 120 days?

Summary:

The simple interest earned on a deposit of $4,000 at 5% for 120 days is $66.67