Compute the amount of interest earned in the following simple interest problem. a deposit of $7,000 at 8.5% for 120 days. 198.33 274.51 19.833.33 71,400.0

198.33 Option a.

Step-by-step explanation:

To calculate Simple Interest we use formula :

Interest rate is given for one year, so first we calculate the interest for one year.

I = prt

I = Interest

P = principal

r = Rate of interest

t = time

I = (7,000)(0.085)(1)

I = 7,000 × 0.085 × 1 = $595 for a year

Now we have to calculate for 120 days.

120 days = 4 months

$595 = 12 months

1 month = 595 ÷ 12 = 49.583

4 months = $49.583 × 4 = $198.33

The amount of interest is $198.33 earned for 120 days