Question

Give the formula of simple interest where I is the interest in dollars P is the principal in dollars are is the interest rate as a decimal and T is the time period in years

Answer 1

The formula for the simple interest rate is:

I = Prt

From the given, we know that:

P = $11,000

r = 9% = 0.09

t = 140/360 years

The interest paid would be:

$\begin{gathered} I=\text{Prt} \\ =(11000)(0.09)(\frac{140}{360}) \\ =385 \end{gathered}$

I = $385

The maturity value would be:

$\begin{gathered} MV=P+I \\ =11000+385 \\ =11385 \end{gathered}$

MV = $11385