Question

Use the formula for simple interest, I = Prt, to find the indicated quantity. Assume a 360 day year.1 = $36, P = $1200; t = 180 days; r=?

Answer 1

Step-by-step explanation:

Given;

We are given the following information for calculating simple interest;

`I=36,P=1200,t=180\text{ }days`

Required;

We are required to calculate the rate of interest, r.

Step-by-step solution;

The formula for the simple interest calculation is given as;

`I=PRT`

We shall make the rate r, the subject of the formula;

`\begin{gathered} Divide\text{ }both\text{ }sides\text{ }by\text{ }PT: \\ (I)/(PT)=(PRT)/(PT) \\ \\ (I)/(PT)=R \end{gathered}`

Note also that the time is given in years. However, what we have here is 180 days out of a 360-day year. That means the time t, would now be;

`\begin{gathered} t=(180)/(360) \\ \\ t=(1)/(2)=0.5 \end{gathered}`

The rate can now be calculated as follows;

`\begin{gathered} R=(36)/(1200*0.5) \\ \\ R=(36)/(600) \\ \\ R=0.06 \end{gathered}`

The rate as we can see is 0.06. As a percentage, this now becomes;

`\begin{gathered} Percentage\text{ }rate=0.06*100 \\ \\ Percentage\text{ }rate=6\% \end{gathered}`

ANSWER:

`r=6`