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​ = ​$7000​, r​ = ​0.2%, t​ = 6months

Answer 1

$7

Explanation:

Recall that simple interest is given by

I = Prt,

Where :

I = interest (we are asked to find this)

P = principal amount = given as $7000

r = rate = given as 0.2% = 0.002

t = time in years = given as 6 months = 0.5 years

SImply substitute the known values into the equation above:

I = Prt

= (7000)(0.002)(0.5)

= $7

Answer 2

$7

Explanation:

Simple interest formula:

I = Prt

6 months = 6 * 30 days = 180 days

1 year = 360 days

t = (180 days)/(360 days) = 0.5

I = $7000 * 0.002 * 0.5

I = $7