Question

Chaze borrowed $1500 from his mother. He promised to repay the money in 1 ½ years, with simple interest at 7 ¾ % per year. What simple interest does Chaze pay?

Answer 1

Chaze pays $174.375 in simple interest.

Explanation:

To calculate the simple interest Chaze pays, we need to use the formula:

Simple Interest = Principal × Rate × Time

Where:

Principal = $1500 (the amount borrowed)

Rate = 7 ¾ % per year (or 7.75% in decimal form)

Time = 1 ½ years (or 1.5 years)

Converting the rate to decimal form:

7.75% = 7.75/100 = 0.0775

Plugging in the values into the formula, we get:

Simple Interest = $1500 × 0.0775 × 1.5

Calculating this:

Simple Interest = $1500 × 0.0775 × 1.5 = $174.375