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 360 days in a year. [ P=$ 840, r=4 %

Answer 1

To calculate the simple interest owed, multiply the principal amount ($840) by the interest rate (4% or 0.04 as a decimal) and the time in years. For one year, the simple interest would be $33.60. The formula used is Interest = Principal × rate × time.

Step-by-step explanation:

Calculating Simple Interest

The question asks us to calculate the simple interest owed using a principal amount, an interest rate, and a time period. The formula for calculating simple interest is Interest = Principal × rate × time. Given the principal (P) is $840 and the rate (r) is 4% (or 0.04 as a decimal), we simply need to multiply these values with the time period (t), assuming a 360-day year, to find the total interest owed.

To further clarify through an example, if the time period is one year, the calculation would be:

• Interest = $840 × 0.04 × 1
• Interest = $33.60

Therefore, the simple interest owed for one year would be $33.60.