Question

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Find the simple interest if $1,000 is borrowed at 8.5% for 6 months (0.5 yr).
OA. $170.00
O B. $42.50
O C. $58.82
D. $4,250.00

Answer 1

Answer:D

Explanation:

First, converting R percent to r a decimal

r = R/100 = 8.5%/100 = 0.085 per year

putting time into years for simplicity

6 months ÷ 12 months/year = 0.5 years

then, solving our equation

I = 10000 × 0.085 × 0.5 = 425

I = $ 425.00

on a principal of $ 10,000.00

at a rate of 8.5% per year

for 0.5 years (6 months) is $ 425.00