Question

a store manager obtained a loan of $25,000 at 6 3/8% interest, for 15 months to purchase supplies. find the amount of simple interest.

Answer 1

To find the simple interest on a $25,000 loan at a rate of 6 3/8% for 15 months, you convert the interest rate to a decimal, then use the simple interest formula with the principal, rate, and time converted to years.

Step-by-step explanation:

To calculate the amount of simple interest the store manager will pay on a $25,000 loan at an interest rate of 6 3/8%, first convert the percentage to a decimal. The interest rate of 6 3/8% equals 0.06375 in decimal form (6 + 3/8 = 6.375, then divide by 100).

Next, use the formula for calculating simple interest:

Simple Interest (I) = Principal (P) × Rate (R) × Time (T)

Here:

• Principal (P) = $25,000
• Rate (R) = 0.06375
• Time (T) is 15 months, which is 15/12 years because the rate is per annum (yearly).

So, the calculation would be:

$25,000 × 0.06375 × 15/12 = Simple Interest

Now you can calculate the exact amount of interest the store manager will have to pay for the loan.

Answer 2

I = P * R * T
I = $25,000 * 6 3/8 * 15
I= 2,390,625