Question

Find the banker's interest to the nearest cent. Principal: $2,500; Rate: 9%; Time: 180 days: Interest: ? (based on a 365 day year).

Answer 1

You can solve this problem by applying the Simple interest formula, which is:

I=PxRxT

I: Simple Interest.
P: Principal.
R: Rate
T: Time (It must be expressed in years or a fraction of years).

You have:

P=$2500
R=9%=0.09
T=180 days=180/365

When you substitute these values into the formula, you obtain:

I=PxRxT
I=($2500)(0.09)(180/365)
I=$110.959