Simple Interest

Simple Interest

I = Prt,

where  p is the principal;

r is the annual interest rate;

t us the time in years.


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


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.


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