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Simple Interest, SMB-006 MC

Gutho invests $10 000 for 1 year and 8 months. The simple interest is calculated at a rate of 4.25% per annum.

What is the total value of the investment at the end of this period, to the nearest dollar?

  1. $10 425
  2. $10 571
  3. $10 708
  4. $14 562
Show Answers Only

`C`

Show Worked Solution

`text{1 year 8 months = 12 + 8 = 20 months}`

`text(Interest)` `=Prn`
  `=10\ 000 xx \frac{4.25}{100} xx \frac{20}{12}`
  `=$708`

 
`:.\ text(Value of Investment)=10\ 000+708=$10\ 708`

`=>  C`