Answer: $36
Step-by-step explanation:
When taking a loan from a bank, we have to pay interest. The Simple Interest Formula is:
Simple Interest (I) = Principal (P) × Interest Rate (r) × Time (t)
Principal (P) is the borrowed amount.
Interest Rate (r) is the percent of the principal to be paid.
Time (t) is the length of time that money is borrowed.
If Ms. Delilio borrowed $1,200 at an interest rate of 12% per year, for 3 months:
First, we have to convert 3 months into years
3 months = 3/12 =0.25 years
Then, find the interest by using the formula
Simple Interest (I) = Principal (P) × Interest Rate (r) × Time (t)
In this example
P = $1200
I = 12%
t = 0.25 years
Then:
I = 1200 × 0.12 × 0.25
I = 36
