If the simple interest earned on an investment of $600 at an interest rate of 5% per annum for 3 years is $90, what is the total amount of simple interest earned?

• A. $60
• B. $90
• C. $120
• D. $150

Answer: (B)

To determine the total amount of simple interest earned on an investment, the formula for simple interest can be used:

[ \text{Simple Interest} = P \times r \times t ]

where:

• ( P ) is the principal amount (initial investment),

• ( r ) is the rate of interest (as a decimal), and

• ( t ) is the time in years.

In this case, the principal ( P ) is $600, the rate ( r ) is 5% (which is 0.05 in decimal form), and the time ( t ) is 3 years.

Calculating the simple interest:

[

\text{Simple Interest} = 600 \times 0.05 \times 3 = 600 \times 0.15 = 90

]

This shows that the simple interest earned over 3 years is $90, which matches the given condition in the question. Since the question asks for the total amount of simple interest earned, and the calculated interest is already $90, this is indeed the correct total amount of simple interest earned on the investment.

The total amount earned in interest aligns directly with the calculated value, confirming that $90 is