Question

Use simple interest to find the ending balance. Round to the nearest cent when necessary. $7.400 at 10.5% for 6 months,$388,50$38,850$7,788.50$7,011.50

Answer 1

Simple Interest

The simple interest I for investment is calculated by:

I = P.r.t

Where P is the principal or initial amount of investment, r is the annual rate of interest, and t is the time the investment is under the period of simple interest.

The ending balance M is calculated as:

M = P + I

The data provided in the question is:

P = $7,400

r = 10,5% = 0.105

t = 6 months = 0.5 years

Calculate the interest:

I = $7,400 * 0.105 * 0.5

I = $388.50

Calculate the ending balance:

M = $7,400 + $388.50 = $7,788.50

The final balance is $7,788.50