Question

The principal P is borrowed at a simple interest rate r for a period of time t. Find the simple interest owed for the use of the money. Assume there are 360 days in a year. P​ = ​$50005000​, r​ = 4.04.0​%, t​ = 99 months

Answer 1

$1,650

Step-by-step explanation:

simple interest owed = principal x interest rate x number of periods

• principal = $5,000
• interest rate = 4% / 12 months = 0.333
• t = 99 months

simple interest owed = $5,000 x 0.333% x 99 = $1,650

or you can also calculate it in years:

• principal = $5,000
• interest rate = 4%
• t = 99 months / 12 months = 8.25 years

simple interest owed = $5,000 x 4% x 8.25 = $1,650