17. A simple interest earned on K 35 000 deposited in a bank at a rate of 6.5% per annum for a

Question

period of 5 years and 3 months is:
(a) K10,943.75
(b) K11,943.75
(c) K12,943.75
(d) K13,943.75
Show working out

Answer 1

To calculate the simple interest earned, we use the formula:

Simple Interest = Principal x Rate x Time

Principal = K35,000
Rate = 6.5% or 0.065
Time = 5 years and 3 months = 5 + 3/12 years
Time = 5.25 years

Simple Interest = 35,000 x 0.065 x 5.25
Simple Interest = 35,000 x 0.3375
Simple Interest = 11,812.5

Therefore, the simple interest earned on K35,000 deposited in a bank at a rate of 6.5% per annum for a period of 5 years and 3 months is K11,812.50.

The closest option is (b) K11,943.75.