Question

How much simple interest would you earn on $1,000 if you left it in an account for 9 months? The account pays 3% simple interest for 1 year. Explain how you found your answer. ​

Answer 1

`I=\$22.5`

Explanation:

we know that

The simple interest formula is equal to

`I=P(rt)`

where

I is the Final Interest Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=(9)/(12)\ years` ----> one year is equal to 12 months

`P=\$1,000\\r=3\%=3/100=0.03`

substitute in the formula above

`I=1,000((9)/(12))(0.03)`

`I=\$22.5`