Question

How much simple interest does $2,560 earn in 17 months at a rate of$1 18\frac{1} {8} %?$ Round to the nearest cent.

Solution

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Answered 1 year ago
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We have to calculate how much simple interest does 2,5602,560 earn in 17 months at a rate of 118%1\dfrac{1}{8}\% . We have to calculate interest using by equation,

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

where is II interest, rr is rate, and PP is principal. In our case r=118=1.125%=0.01125r=1\dfrac{1}{8}=1.125\%=0.01125,P=2560P=2560 USD, and t=17months=1712t=17\text{months}=\dfrac{17}{12} so we calculate interest,

I=25600.011251712=28.801712=40.8USD.\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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