How do you find the simple interest paid after 5 months on a loan of $7,000 borrowed at an annual interest rate of 5%?

1 Answer
Dec 16, 2016

Answer:

#SI = $145.83#

Explanation:

The for simple interest is #SI = (PxxR xxT)/100#

The time is given in years, so in this case, the time of 5 months has to be converted to years by dividing by 12.

5 months = #5/12# years.

#SI = (7000xx 5 xx (5/12))/(100)#

This can also be written as:

#SI = (7000 xx 5 xx 5)/(" "100 xx 12)#

#SI = $145.83#