Question

Suppose you deposit $1,348 at an interest rate of 2.5% per year for 18 months. Find the simple interest. Then find the total of principal plus interest.

Answer 1

The answer would be $4212.50

Answer 2

The formula to find the simple interest I is

I = PRT

Here

P = Principal

R = rate of interest

T = time in years

The principal given is $1,348

The rate of interest is 2.5% = 0.025

Time = 18 months = 1=(18/12) years = 1.5

Substituting in the formula we get

I = 1348 × 0.025 × 1.5

I= $50.55

Also the amount = Principal + interest

Amount = 1348 + 50.55 = $1,398.55

The interest is $50.55

And the amount is $1,398.55