The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of interest? A. 3.90 % B. 3.92 % C. 3.95 % D. 3.98 %

The correct answer is A. 3.90 %.

The formula for simple interest is $I = PRT$, where $I$ is the interest, $P$ is the principal, $R$ is the rate of interest, and $T$

is the time in years. We are given that $P = 5000$, $I = 100$, and $T = \frac{25}{365} = 0.0714$. Substituting these values into the formula, we get $100 = 5000 \cdot R \cdot 0.0714$. Solving for $R$, we get $R = \frac{100}{5000 \cdot 0.0714} = 0.0390 = 3.90\%$.

Option B is incorrect because $3.92\%$ is not a solution to the equation $100 = 5000 \cdot R \cdot 0.0714$. Option C is incorrect because $3.95\%$ is not a solution to the equation $100 = 5000 \cdot R \cdot 0.0714$. Option D is incorrect because $3.98\%$ is not a solution to the equation $100 = 5000 \cdot R \cdot 0.0714$.