Question

Calculate the simple interest earned. Round to the nearest cent.P = $3500, r = 5.9%, t = 6 months

Answer 1

Simple Interest formula

$I=P\cdot r\cdot t$

where

• I: interest, in dollars

,

• P: principal, in dollars

,

• r: interest rate, as a decimal

,

• t: time, in years

Substituting with P = $3500, r = 0.059 (= 5.9/100), t = 0.5 (6 months are equivalent to half a year), we get:

$\begin{gathered} I=3500\cdot0.059\cdot0.5 \\ I=103.25 \end{gathered}$

The simple interest earned is $103.25