Question

SBI offers a term deposit account paying investors 19% p.a. simple interest on investments over $200,000 for 3 years or more. Mani decides to invest $250,000 in this account for 5 years. How much interest will Mani earn at the end of the investment?

A) 233500 B) 234500 C) 235500 D) 236500 E) 237500

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Answer


To find the amount of interest Mani will earn from his investment, we can use the formula for simple interest:

$$ \text{S.I.} = \frac{P \times R \times T}{100} $$

where:

  • ( P = \text{$250,000} ) (the principal amount),
  • ( R = 19% ) (annual interest rate),
  • ( T = 5 ) years (time period).

Plugging in these values:

$$ \text{S.I.} = \frac{250,000 \times 19 \times 5}{100} $$

Calculating the above:

$$ \text{S.I.} = \frac{23,750,000}{100} = 237,500 $$

Therefore, Mani will earn $237,500 in interest at the end of the 5-year investment term.

Thus, the correct option is E) 237500.


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