Question

Ignacio earns 5 percent simple interest annually on his savings account. How much interest will he earn each month on $1250?. .

Answer 1

find the interest earned in 1 year and divide it by 12 (number of months per year)

simple interest=principal times rate times time

so we have 1250 principal (amount invested)
rate is 5% or 0.05
time is 1 year

in 1 year, he earns 1250 times 0.05 times 1 or $62.5 per year
divide by 12
62.5/12=5.2083333333333333333333333333333
earns about $5.21 per month in interest

Answer 2

The interest earned by Ignacio will be $5.21 per month.

What is simple interest?

Simple interest is calculated just on the loan's principal amount, whereas compound interest is calculated on both the principal and the cumulative interest.

So we have 1250 principal (amount invested rate is 5% or 0.05

time is 1 year.

$\rm SI =\dfrac{P\times R\times T}{100}$

$\rm SI=\dfrac{1250\times 0.054\times 1}{100}$

SI = 62.5

in 1 year, he earns 1250 times 0.05 times 1 or $62.5 per year

divide by 12

= 62.5   /  12  =  $5.21

Therefore the interest earned by Ignacio will be $5.21 per month.

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