Question

Find the simple interest owed for the use of the money. Assume 360 days in a year. P=16,500, r=6%, t=180 days

Answer 1

The formula for simple interest is the following:

`S=Prt`

In this formula,
`S` is the amount of interest,
`P` is the principal (or initial) amount,
`r` is the interest rate, and
`t` is the length f time, typically in years.

First, let's make a couple of changes to how we wrote down the variables.

• Change the interest rate,
  `6\%`, to the decimal value
  `0.06`.
• Convert the length of time to years. 180 days divided by 360 days per year equals
  `0.5` years.

Substitute in the values and solve with a calculator.

`\begin{aligned}S&=16,500\cdot0.06\cdot0.5\\&=\boxed{495}\end{aligned}`