Question

Find the simple interest on $25000 for six months at a rate of 8.5% per year

Answer 1

Interest = P*R*T
------
100


where P = starting amount , R is the rate per cent and T = time in years.

Answer 2

Convert 6 months into years.

6 months =612 years=0.5 years

Find an interest by using the formula I=Pit, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.

In this example P = $25000, i = 8.5% and t = 0.5 years, so

I = P.i.t
I = 25000.0.085.05
I = 1062.5

Find an amount by using the formula A=P+I.

Since P = $25000 and I = $1062.5 we have