How many days does a simple interest of $54 represent if the amount is based on an annual calculation of 6% on $1,000?

• A. 30 days
• B. 60 days
• C. 90 days
• D. 120 days

Answer: (C)

To determine how many days a simple interest of $54 represents at an annual interest rate of 6% on a principal amount of $1,000, we can begin by calculating the interest earned per year.

The formula for simple interest is given by:

[

I = P \times r \times t

]

where:

• ( I ) is the interest,

• ( P ) is the principal amount ($1,000),

• ( r ) is the interest rate (6% per annum, or 0.06), and

• ( t ) is the time in years.

First, we calculate the annual interest:

[

I = 1000 \times 0.06 \times 1 = 60

]

This means that in one year, the interest earned on $1,000 at a rate of 6% is $60.

Next, we are interested in how many days correspond to an interest of $54. To find this, we can set up a ratio of interest earned per day to the total interest earned in a year. Since $60 is earned in one year (365 days), we can calculate the daily interest:

[

\text{Daily Interest}