The amount of interest earned by an account based on simple interest varies jointly as the principal amount and the number of years the investment has been held. If a principal of $6000 invested for 3 Years earns $540.00 in interest, how much would be drawn by $4000 invested for 8 years?
A) $480.00
B) $545.00
C) $960.00
D) $360.00

Question

Quizplus · Accepted Answer

The formula for simple interest is $I = PRT$, where $I$ is the interest earned, $P$ is the principal amount, $R$ is the rate of interest, and $T$ is the time in years. Given that $6000 invested for 3 years earns $540, we can find the rate: $540 = 6000 \times R \times 3$. Solving for $R$, we get $R = 0.03$ or 3%. For a $4000 investment over 8 years at the same rate, the interest earned would be $I = 4000 \times 0.03 \times 8 = 960$.

The Amount of Interest Earned by an Account Based on Simple