Answer
$I=Prt$ (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:
$I=Prt$
$I=1000*0.1*(2.5)=100*2.5=\$250$
