Question

How much simple interest does $2,560 earn in 17 months at a rate of$1 $\frac{1} {8}$ %?$ Round to the nearest cent.

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

Step 1

1 of 2We have to calculate how much simple interest does $2,560$ earn in 17 months at a rate of $1\dfrac{1}{8}\%$ . We have to calculate interest using by equation,

$\begin{align*} I=Ptr \end{align*}$

where is $I$ interest, $r$ is rate, and $P$ is principal. In our case $r=1\dfrac{1}{8}=1.125\%=0.01125$,$P=2560$ USD, and $t=17\text{months}=\dfrac{17}{12}$ so we calculate interest,

$\begin{align*} I=2560 \cdot 0.01125\cdot \dfrac{17}{12}=28.80\cdot \dfrac{17}{12}=40.8\,\,\text{USD}. \end{align*}$

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