I noted that OKAY sounds like KAY .Is it true CAKE in informal American English?

You're close, but not quite! While "okay" and "kay" sound similar, "cake" is not commonly pronounced as "kay" in informal American English.

The common informal pronunciation for "cake" is simply "cake," with the "k" sound at the beginning.

However, you are right that Americans often use informal pronunciations and shorten words. For example, "soda" is often shortened to "soda pop" or just "pop."

So, while "cake" is not usually pronounced as "kay," it's always good to be aware of informal speech patterns in different regions and contexts.