## Basic College Mathematics (9th Edition)

$I=Prt$ (time in years or if in months divide by 12). See examples below.
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:$I=PrtI=1000*0.1*(2.5)=100*2.5=\$250$