Question

How much interest was earned on $108,310 for 120 months if it was invested at a 4.5% simple interest

Answer 1

$48,739.50

Explanation:

You are going to want to use the simple interest formula for this.

`I = Prt`

P = principal amount

r = interest rate (decimal form)

t = time (years)

First convert 4.5% into its decimal form:

4.5% ->
`(4.5)/(100)` -> 0.045

Next, we need to change 120 months into years:

`(120)/(12) =10`

(10 years)

Now, plug in the values into the equation:

`I=108,310(0.045)(10)`

`I=48,739.50`

The interest earned after 120 months was $48,739.50