Question

If the interest charge is 1.5 percent per month on an overdraft, how much interest is due one month after an overdraft of $50?

Answer 1

The simple interest due on a $50 overdraft with a 1.5% monthly interest rate after one month is $0.75. This is calculated using the simple interest formula: Interest = Principal × Rate × Time.

Step-by-step explanation:

If the interest charge is 1.5 percent per month on an overdraft, the amount of interest due one month after an overdraft of $50 can be calculated using the simple interest formula:

Interest (I) = Principal (P) × Interest Rate (R) × Time Period (T)

Here:

• Principal (P) = $50 (the amount of the overdraft)
• Interest Rate (R) = 1.5% per month or 0.015 when expressed as a decimal
• Time Period (T) = 1 month

Now, plug these values into the formula:

I = $50 × 0.015 × 1 = $0.75

So, the simple interest due on an overdraft of $50 after one month is $0.75.

Answer 2

Rewrite the percentage as a decimal:

1.5% = 0.015

Multiply by the amount of the overdraft:

50 x 0.015 = 0.75

The interest is $0.75