Question

Simple Interest:

I = P*r*t

where: I = Interest, P = Principle, r = rate and t = time

Principle = $1200, Annual Interest Rate = 3%, Time = 18 months


Select one:

a. Interest = $44 and Balance = $1244

b. Interest = $34 and Balance = $1234

c. Interest = $54 and Balance = $1254

Answer 1

Option answer:

c. Interest = $54 and Balance = $1254

Answer:

A = $1,254.00

I = A - P = $54.00

Equation:

A = P(1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 3%/100 = 0.03 per year.

Solving our equation:

A = 1200(1 + (0.03 × 1.5)) = 1254

A = $1,254.00

The total amount accrued, principal plus interest, from simple interest on a principal of $1,200.00 at a rate of 3% per year for 1.5 years is $1,254.00.