Answer:
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
