If Bobby invests his money for one year at the same interest rate as his brother, then he will earn $3 amount.
Thus, option A $3 is correct.
Given that:
- Amount Bobby wants to invest = $100
- Time for which Bobby wants to invest = 1 year.
- Amount his brother invested = $2000
- Time interval for which his brother invested money = 1 year.
- Simple interest earn by his brother = $60
To find:
Interest that Bobby will earn at same interest rate as his brother after 1 year of investment of $100.
Calculations:
If someone invests P amount for T years with simple interest rate R% per year, then the simple interest that that person will earn is given by:
[tex]SI = \dfrac{P \times R \times T}{100}[/tex]
Putting values of P, R and T of Bobby's brother's investment, we have:
[tex]60 = \dfrac{2000 \times 1 \times R}{100}\\\\6000 = 2000R\\\\R = \dfrac{6000}{2000} = 3\%[/tex]
At that rate, the SI for Bobby's $100 investment for 1 year is:
[tex]SI = \dfrac{100 \times 3 \times 1}{100} = \$3[/tex]
Thus, Bobby will get $3 as interest.
Learn more about simple interest here:
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