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What sum of money will produce $2,860 interest in 3 years 3 months at 2.5% p.a. simple interest?  Ops:   A. $36,500    B. $35,600    C. $32,500    D. $35,200

Question

What sum of money will produce 2,860interestin3years3monthsat2.52,860 interest in 3 years 3 months at 2.5% p.a. simple interest?  Ops:   A. 36,500    B. 35,600  C.35,600    C. 32,500    D. $35,200

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Solution

To solve this problem, we need to use the formula for simple interest which is I = PRT, where I is the interest, P is the principal amount (the sum of money), R is the rate of interest, and T is the time.

In this case, we know the interest (I) is $2,860, the rate of interest (R) is 2.5% per annum (or 0.025 as a decimal), and the time (T) is 3 years and 3 months (or 3.25 years in decimal form).

We need to find the principal amount (P), so we rearrange the formula to solve for P:

P = I / (RT)

Substituting the given values:

P = 2860 / (0.025 * 3.25)

P = 2860 / 0.08125

P = $35,200

So, the sum of money that will produce 2,860interestin3years3monthsat2.52,860 interest in 3 years 3 months at 2.5% p.a. simple interest is 35,200. Therefore, the correct answer is D. $35,200.

This problem has been solved

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