Question

Calculate the simple interest earned. Round to the nearest cent.P = $8,000, r = 6.2%, t = 8 months

Answer 1

$330.67

Explanation:

The simple interest earned on a principal, P is calculated using the formula below:

`\text{S}I=\frac{\text{PRT}}{100}\text{ where}\begin{cases}P=Prin\text{cipal, the amount saved.} \\ R=\text{Rate (in \%)} \\ T=\text{Time (in years)}\end{cases}`

From the given problem:

• P = $8,000

,

• r = 6.2%

Since the time, t is given in months, divide by 12 to get the value in years.

• t = 8 months = (8/12) years

Substitute into the formula:

`SI=(8000*6.2*8)/(100*12)=\$330.67`

The simple interest earned is $330.67 correct to the nearest cent.