Final answer:
To calculate the simple interest on $1,300 at a rate of 2 1/2% for 3 months, convert the rate to a decimal (0.025), and time to years (0.25). The simple interest is calculated as $1,300 multiplied by 0.025 multiplied by 0.25, resulting in $8.125.
Step-by-step explanation:
To calculate the simple interest earned on a principal amount for a certain period at a given rate, you use the simple interest formula:
Simple Interest = Principal × Rate × Time
In this case, the principal amount is $1,300, the annual interest rate is 2 1/2% or 0.025 (when expressed as a decimal), and the time is 3 months. Since the time in the formula should be in years, we convert 3 months into a fraction of a year by dividing by 12 (the number of months in a year).
First, convert the interest rate from a percentage to a decimal:
2 1/2% = 2.5% = 0.025
Next, convert the time in months to years:
Time in years = 3 months / 12 months/year = 0.25 years
Now apply the values to the formula:
Simple Interest = $1,300 × 0.025 × 0.25 = $8.125
Therefore, the simple interest for $1,300 at a rate of 2 1/2% over 3 months is $8.125.