Question

Find the simple interest earned to the nearest cent for each principal, interest rate, and time.

1,665, 6.75%, 3 years

a.$2,105, 11%, 1 3/4 years
b.$903, 8.75%, 18 months
c.$4,275, 19%, 3 months

Answer 1

Simple interest is calculated using the formula Interest = Principal × Rate × Time, with the time expressed in years. The interest for $1,665 at 6.75% for 3 years is $336.51, for $2,105 at 11% for 1 3/4 years is $405.46, for $903 at 8.75% for 18 months is $118.54, and for $4,275 at 19% for 3 months is $203.06.

Step-by-step explanation:

Calculating simple interest requires the formula Interest = Principal × Rate × Time, where time is in years. Let's use this formula to find the simple interest for each scenario to the nearest cent.

1. $1,665 at an interest rate of 6.75% for 3 years:
   
   Interest = $1,665 × 0.0675 × 3 = $336.5125, which rounds to $336.51.
2. $2,105 at an interest rate of 11% for 1 3/4 years:
   
   Interest = $2,105 × 0.11 × 1.75 = $405.4625, which rounds to $405.46.
3. $903 at an interest rate of 8.75% for 18 months (1.5 years):
   
   Interest = $903 × 0.0875 × 1.5 = $118.54375, which rounds to $118.54.
4. $4,275 at an interest rate of 19% for 3 months (0.25 years):
   
   Interest = $4,275 × 0.19 × 0.25 = $203.0625, which rounds to $203.06.

Now, you know how to compute the simple interest for various principal amounts, rates, and periods, using the formula and converting the time period to years when necessary.