Question

The principal P is borrowed at a simple interest rate r for a period of time t. Find the simple interest owed for the use of the money. Assume days in a year.

P​ = 7000​$​, r​ = 7.5​%, t​ =15 months

Answer 1

$656.25

Explanation:

The formula for simple interest is:

`A=Prt`

Where A is the final amount, P is the principal, r is the rate, and t is the time in years.

The question does not specify whether the interest rate is annual or not, but I will assume it is! To convert 15 months to years, divide it by 12 months!

`(15)/(12)=(5)/(4)=1.25`

I also need the percent to be a decimal. To convert a percent to a decimal, divide by 100.

`7.5/100 = 0.075`

Now, plug the values into the formula!

`A=7000*0.075*1.25\\A=656.25`

The total amount after 15 months is $656.25