Question

I need to know how much simple interest is earned.

Answer 1

Simple Interest is calculated using the formula:

`I=(PRT)/(100)`
`\begin{gathered} \text{where:} \\ ^(\prime)P^(\prime)\text{ represents the principal} \\ ^(\prime)R^(\prime)\text{ represents the rate} \\ ^(\prime)T^(\prime)\text{ represents the time} \end{gathered}`

From the question, we are provided with the following:

`\begin{gathered} P=\text{ \$4,000} \\ R=3.4\text{ \%} \\ T=1(1)/(2)\text{ years} \end{gathered}`

Thus, we have:

`\begin{gathered} I=(4000*3.4*1.5)/(100) \\ I=\text{ \$204} \end{gathered}`

Hence, the Simple interest earned is $204