Question

Margo borrows $900, agreeing to pay it back with 7% annual interest after 9 months. How much interest will she pay? Round your answer to the nearest cent, if necessary.

Answer 1

Answer:

$I=\ 47.25$

Step-by-step explanation:

we know that

The simple interest formula is equal to

$I=P(rt)$

where

I is the Final Interest Value

P is the amount of money borrowed

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=9/12\ years\\ P=\ 900\\r=0.07$

substitute in the formula above

$I=900(0.07(9/12))$

$I=\ 47.25$