Question

Find the simple interest owed for the use of the money. Assume 360 days in a year. P=16,500, r=6%, t=180 days

Answer 1

The formula for simple interest is the following:

$S=Prt$

In this formula, $S$ is the amount of interest, $P$ is the principal (or initial) amount, $r$ is the interest rate, and $t$ is the length f time, typically in years.

First, let's make a couple of changes to how we wrote down the variables.

• Change the interest rate, $6\%$, to the decimal value $0.06$.
• Convert the length of time to years. 180 days divided by 360 days per year equals $0.5$ years.

Substitute in the values and solve with a calculator.

$\begin{aligned}S&=16,500\cdot0.06\cdot0.5\\&=\boxed{495}\end{aligned}$