Question

If a loan for $500 at 8.75% interest per year is paid in 3 months, how much is the
interest? (Use I = PRT)

Answer 1

Answer:

  $10.94

Step-by-step explanation:

In the given formula, T is in years. 3 months is 3/12 years, so your interest is ...

  I = PRT

  I = $500×0.0875×1/4 = $10.9375 ≈ $10.94

$10.94 is the interest paid on the loan.