Final answer:
To determine the monthly simple interest rate, use the formula I = PRT and solve for R, which results in R = $169.05 / ($4830 × 2/12). Calculate this to find R, the monthly interest rate.
Step-by-step explanation:
To determine the monthly rate of simple interest Indira was charged on a $4830 invoice that was two months overdue with interest charges of $169.05, we can use the formula for calculating simple interest:
I = PRT
Where I is the interest, P is the principal amount (initial amount of money), R is the rate of interest per time period, and T is the time the money is invested or borrowed. In this case, we have:
- I = $169.05 (the interest paid)
- P = $4830 (the initial principal amount)
- T = 2/12 years (since it was two months overdue, we convert months to years by dividing by 12)
We need to find the monthly interest rate R. We rearrange the formula to solve for R:
R = I / (P × T)
Substituting the values we have:
R = $169.05 / ($4830 × 2/12)
Calculating the above gives us R (monthly interest rate). Note that to express R as a percentage, you would multiply the result by 100.