Question

How much simple interest does $2,000 earn in 11 months at an interest rate of 3.4%?

Answer 1

$62.33

Step-by-step explanation

We are given that:

Principal = $2000

Rate = 3.4%

Time = 11 months

Simple interest on a principal, P, at a rate, R, in time, T (in years) is given as:

`I\text{ = }\frac{P\cdot\text{ R }\cdot\text{ T}}{100}`

Therefore, the simple interest is:

`\begin{gathered} I\text{ = }\frac{2000\cdot\text{ 3.4 }\cdot(11)/(12)}{100} \\ ((11)/(12)because\text{ it is 11 months and that is }(11)/(12)\text{ of a year)} \\ \Rightarrow\text{ I = }\frac{2000\cdot\text{ 3.4 }\cdot\text{ 11}}{12\cdot\text{ 100}} \\ I\text{ = \$62.33} \end{gathered}`

That is the Simple Interest.