Question

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

(ROUND TO THE NEAREST CENT, IF NECESSARY)

Answer 1

`\$17.50`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final interest

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=(14)/(12)\ years\\ P=\$500\\r=3\%=3/100=0.03`

substitute in the formula above

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

`I=\$17.50`