Question

Margo borrows $500, agreeing to pay it back with 3% annual interest after 14 months. How much interest will she pay?

Answer 1

She pays $17.50

Explanation:

Interest Formula:

I = P(rt)

I = final interest

P = money borrowed

r = rate of interest

t = number of time periods

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Plug in the values

t = 14/12 years

P = 500 dollars

r = 3% = 3/100 = 0.03

I = (500)(0.03)(14/12)

I = $17.50