Simple Interest

Simple Interest

I = Prt,

where p is the principal;

r is the annual interest rate;

t us the time in years.

Example:-

To bye furniture for a new apartment, Jennifer Wall borrowed 5000 at 8% simple interest for 11 months. How much interest will she pay ?

Solution:-

From the formula, I = Prt, with P = 5000, r = .08, and t = $\frac{11}{12}$ (in years). The total interest she will pay is

$I = 5000(.80)(\frac{11}{12}) = 366.67$

I = 366.67.