John invested $5,000 at an annual simple interest rate of 4%. How much interest will he earn in 3 years?

A $200

B $400

C $600

D $800

✓ Correct Answer: Option C

Simple interest (I) = Principal (P) * Rate (R) * Time (T). I = $5,000 * 0.04 * 3. I = $200 * 3 = $600.

💡 Why is C) the correct answer?

The correct answer to the question "John invested $5,000 at an annual simple interest rate of 4%. How much interest will he earn in 3 years?" is Option C: $600.

The other options — A) $200, B) $400, D) $800 — are incorrect for this GMAT Exam Prep question. As explained above: Simple interest (I) = Principal (P) * Rate (R) * Time (T). I = $5,000 * 0.04 * 3. I = $200 * 3 = $600.

📚 About This GMAT Exam Prep Practice Question

This 1-level GMAT Exam Prep question from the Quantitative 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 GMAT Exam Prep practice test or use flashcards for spaced repetition review.

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John invested $5,000 at an annual simple interest rate of 4%. How much interest will he earn in 3 years?

✓ Correct Answer: Option C

📚 About This GMAT Exam Prep Practice Question

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