Question

4. Peter is calculating interest earned on a deposit of $275 in an account that earns 8% simple interest after 12 years.

I=prt
I=275(.8)(12)
I=2,640

a. What did Peter do incorrectly?


b. What is the correct amount of interest?

Answer 1

Answer:

a) He substituted 0.8 instead of 0.08.

b) $264

Step-by-step explanation:

From the question, the principal is p= $275, the rate is r=0.08, and the time is t=12 years.

We substitute into the formula to get:

$I=prt$

$I=275 \times 0.08 \times 12 \\ I=264$

a) The mistake is that, he substituted 0.8 instead of 0.08.

b) The correct amount is $264