Question

What is the simple interest if $3800 is borrowed at 18.4% for 6 months (0.5 yr)?

a) $103.26
b) $349.60
c) $34,960.00
d) $1398.40

Answer 1

The simple interest for a loan of $3800 at an interest rate of 18.4% for 6 months (0.5 years) is b)$349.60.

Step-by-step explanation:

To calculate the simple interest accrued on a loan, you can use the formula: Interest = Principal × Rate × Time. The principal is the amount borrowed, the rate is the interest rate as a decimal, and the time is the period of the loan in years.

Given that the student has borrowed $3800 at an interest rate of 18.4% for 6 months (0.5 years), the calculation would be as follows:

Interest = $3800 × 0.184 × 0.5

Interest = $350.40

Therefore, the correct answer is b) $349.60, when rounded to the nearest cent.