Question

Find the simple interest on an investment of $3500 for 2.5 years at

5.5% per annum.
$428.52
$482.52
$418.25
$481.25

Answer 1

$481.25

Explanation:

The formula for simple interest is i = p*r*t, in which p is the principal, r is the interest rate as a decimal fraction, and t is the time in years.

Here p = $3500, r = 0.055 and t =2.5 yrs, and so the simple interest is

i = ($3500.00)(0.055)(2.5 yr), or

i = $481.25