Question

Vincent borrowed $500 from Mitchell for six months. How much interest will Mitchell earn if he charges Vincent a simple interest rate of 3 percent? simple interest = P × r × t

Answer 1

Principal P = $500,  Rate = 3 % = 3/100 = 0.03  would assume per year,

Time t = 6 months = (6/12) year = 0.5 year.

Simple Interest, I = P*r*t

             

                            = 500*0.03*0.5 = 7.5

Simple interest = $7.50