Basic College Mathematics (9th Edition)

Published by Pearson
ISBN 10: 0321825535
ISBN 13: 978-0-32182-553-7

Chapter 6 - Percent - Test: 19


$I=Prt$ (time in years or if in months divide by 12). See examples below.

Work Step by Step

The simple interest formula is: $Interest=Principal*rate*time$ $I=Prt$ If time is expressed in months, we divide by 12 months to convert to years ($t/12$), otherwise we leave time as is. Example 1: Bob invests $1000$ at $10\%$ for 9 months. Find the simple interest: Answer: $I=Prt$ $I=1000*0.1*(9/12)=100*9/12=\$75$ Example 2: Bob invests the same amount at the same rate for $2.5$ years. Find the simple interest. Answer: $I=Prt$ $I=1000*0.1*(2.5)=100*2.5=\$250$
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