Question

3. If Douglas Reiner wanted to take out a simple interest note for $7,500 at 5.5% for 60 days, what was the maturity value and interest paid?

Answer 1

Given the following question:

We are given

7,500 (our principal)

5.5% (our rate)

60 days (our time)

Using the formula to find the total interest paid:

$I=Prt$$\begin{gathered} I=Prt \\ P=7500 \\ r=5.5 \\ t=60 \\ 60\div365=0.164384 \\ I=7500\times0.055\times0.164384 \\ 7500\times0.055=412.5 \\ 412.5\times0.164384=67.8084 \\ 67.8084 \\ 8>5 \\ =67.81 \end{gathered}$

Total interest paid is $67.81