Final answer:
The simple interest owed for the use of the borrowed money is $275.
Step-by-step explanation:
To find the simple interest owed for the use of $2500 borrowed at a simple interest rate of 5.5% for 24 months, we can use the formula:
Simple Interest = Principal x Rate x Time
Substituting the given values:
Simple Interest = $2500 x 0.055 x 2 = $275
Therefore, the simple interest owed for the use of the money is $275.To calculate the simple interest owed for the use of the money, we can use the formula for simple interest:
\[ \text{Simple Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] Given: - Principal (\( P \)): $2500 (amount borrowed) - Rate (\( r \)): 5.5% per year (as a decimal, this is 0.055) - Time (\( t \)): 24 months, which is 2 years (because there are 12 months in a year, so 24 months is 24/12 years) Step-by-step calculation:
1. Convert the rate from percentage to a decimal by dividing by 100: \[ r = 5.5\% = \frac{5.5}{100} = 0.055 \] 2. Convert time in months to years by dividing by 12: \[ t = 24 \text{ months} = \frac{24}{12} \text{ years} = 2 \text{ years} \] 3. Plug these values into the simple interest formula:
\[ \text{Simple Interest} = P \times r \times t \] \[ \text{Simple Interest} = 2500 \times 0.055 \times 2 \] \[ \text{Simple Interest} = 2500 \times 0.11 \] \[ \text{Simple Interest} = 275 \] 4. The simple interest owed is $275. However, we have to make sure that we round our answer to the nearest cent.
In this case, since the calculated interest is exactly $275.00, there's no need for additional rounding, as it is already to the nearest cent. Therefore, the simple interest owed for the use of $2500 at a simple interest rate of 5.5% for a period of 24 months is $275.00.