Question

If anyone could show me how to do it :)

How much simple interest is earned on $1000 at 3% interest for 3 months?
Give your answer in dollars and cents.

Simple Interest
I = p • r • t

Answer 1

STEP 1: Convert interest rate of 3% per month into rate per year.
rate per year = rate per month⋅12=3%⋅12=36%

STEP 2: Convert 3 months into years.
3 months =3/12 years=0.25 years

STEP 3: Find an interest by using the formula I=P⋅i⋅t, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.
In this examplee P = $1000, i = 36% and t = 0.25 years, so \[I=P \times i \times t\]
\[I=1000\times0.36\times0.25\]
\[I=90\]