Simple Interest Practice
Question 1
Calculate the simple interest of a $9000 loan
with the interest rate of 20%. The
duration of the loan is 3 months.
Answer
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Step by Step Solution
Step 1
We can start with the simple interest formula:
Where:
Where:
- P is the principal ($9000)
- r is the interest rate per year (20 ÷ 100 = 0.2)
- t is the loan duration in year (3 ÷ 12 months = 0.25 year).
Step 2
With P=9000, r=0.2 and t=0.25, we can substitute these values into the formula as shown:
Step 3
The calculated interest is $450. Hence, the answer is C.
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