Question

Lupe put $12,000 in a certificate of deposit that gained interest at a rate of 6.5%. How much interest did the account gain after 3 months?

Answer 1

195

Explanation:

3 month is .25 years

6.5/100 = .065

12000 x .065 x .25 = 195

Answer 2

$195

Explanation:

We use the simple interest formula.

I = Prt

I = Interest

P = Principal (initial value)

r = Interest rate

t = Time (years)

P = $12,000

r = 6.5% which we convert to a decimal by dividing by 100 6.5/100 = .065

t = 3 months which we convert to years by dividing by 12 3/12 = 1/4 = .25

Plug in the values

I = 12000 * .065 * .25

I = $195 interest gained