Question

Margo borrows $900, agreeing to pay it back with 7% annual interest after 9 months. How much interest will she pay? Round your answer to the nearest cent, if necessary.

Answer 1

`I=\$47.25`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the amount of money borrowed

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=9/12\ years\\ P=\$900\\r=0.07`

substitute in the formula above

`I=900(0.07(9/12))`

`I=\$47.25`