Question

Find the amount of interest $450,000 earns in 1 year at a simple interest rate of 3.5%.

Answer 1

$15,750

Step-by-step explanation

We want to find the interest that is earned from $450,000 in a year at a rate of 3.5%.

To do this, we have to use the formula for Simple Interest:

`SI\text{ = }\frac{P\cdot\text{ R }\cdot\text{ T}}{100}`

where P = principal = $450,000

R = rate = 3.5%

T = time (in years) = 1 year

Therefore, the simple interest is:

`\begin{gathered} SI\text{ = }\frac{450000\cdot\text{ 3.5 }\cdot\text{ 1}}{100} \\ SI\text{ = \$15,750} \end{gathered}`