742 views
2 votes
You deposit $1300 into account earning An annual interest rate of 10.5% calculate simple interest earned in eight months

User Bhoomi
by
4.7k points

1 Answer

6 votes

If an amount of money, P, the principal, is invested for a period of t months at a monthly interest rate r, the amount of interest, I, earned is:

I = Prt

In this case, we are given a rate of interest per year, then we must divide it by 12 (12 months equivalent to a year) so we can get the monthly rate, then we get:


I=P((r)/(12))t

By replacing 1300 for P, 0.105 (10.5%) for r and 8 for t, we get:


I=1300((0.105)/(12))8=91

Then, the simple interest earned after 8 months will be $91

User Steven Guerrero
by
5.2k points