A principal amount of $2,500 is invested at an annual simple interest rate of 4% for 3 years. What is the total interest earned?

A $100

B $300

C $2,800

D $2,600

✓ Correct Answer: Option B

Simple interest is calculated using the formula I = PRT, where P is the principal, R is the rate, and T is time. So, I = $2,500 × 0.04 × 3 = $300.

💡 Why is B) the correct answer?

The correct answer to the question "A principal amount of $2,500 is invested at an annual simple interest rate of 4% for 3 years. What is the total interest earned?" is Option B: $300.

The other options — A) $100, C) $2,800, D) $2,600 — are incorrect for this GED Exam Prep question. As explained above: Simple interest is calculated using the formula I = PRT, where P is the principal, R is the rate, and T is time. So, I = $2,500 × 0.04 × 3 = $300.

📚 About This GED Exam Prep Practice Question

This 2-level GED Exam Prep question from the Mathematical Reasoning topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free GED Exam Prep practice test or use flashcards for spaced repetition review.

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A principal amount of $2,500 is invested at an annual simple interest rate of 4% for 3 years. What is the total interest earned?

✓ Correct Answer: Option B

📚 About This GED Exam Prep Practice Question

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