Question

Compute the amount of interest earned in the following simple interest problem. A deposit of $1,295 at 7% for 180 days = _____. (Note: Use 365 days in a year)

$4.44
$44.42
$444.19
$16,317.00

Answer 1

44.42 is correct

Explanation:

Answer 2

`\$44.42`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the amount of money in interest

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=(180/365)=0.49\ years\\ P=\$1,295\\r=0.07`

substitute in the formula above

`I=1,295(0.07*0.49)=\$44.42`