Question

Find the simple interest paid to borrow $5350 for 5 months at 6%

Answer 1

The formula in computing the simple interest of a loan is:

I = Prt

Where I = interest

             P = Principal

             r = simple interest rate

             t = time in years

Substituting the given to the formula:

I = ($5,350)(6%)(5/12)

** take note that the time should be in years so we need to convert the 5 months to years

I = $133.75