Question

The table shows interest owed for a home improvement loan based on how long it takes to pay off the loan.

A. What is the simple interest owed on $900 for 9 months?

B. The simple interest owed on $2500 for 18 months.

C. find the simple interest old for $5600 for six months

Answer 1

Remember that the formula for simple interest is:

`I=prt`
Where I is the interest to paid, p is the loan, r is the interest rate (in decimal), and t is the time (in years).

A. We know that the interest rate for a loan of 9 months is 2.9%, but we need to convert that rate to decimal. To do that just divide the interest rate by 100%:

`(2.9)/(100) =0.029`
Next, we are going to find the time t in years. Since the period of time is 9 months, we are going to dive by 12, the number of months in a year, to obtain the time in years:

`t= (9)/(12) =0.75`
Now, we just need to replace the values in our formula to find the interest owned:

`I=(900)(0.029)(0.75)=19.58`
We can conclude that the interest owed for a home improvement loan of $900 after 9 months is $19.58.

B. Similarly:

`r= (3.1)/(100) =0.031`

`t= (18)/(12) =1.5`

`I=(2500)(0.031)(1.5)=116.25`
We can conclude that the interest owed for a home improvement loan of $2500 after 18 months is $116.25.

C. Similarly:

`r= (2.4)/(100) =0.024`

`t= (6)/(12) =0.5`

`I=(5600)(0.024)(0.5)=67.2`
We can conclude that the interest owed for a home improvement loan of $5600 after 6 months is $67.2