What is the simple interest due on a six-month loan of $3250 if the interest rate is 7.75%
Assuming that it's an annual interest rate ---
(3250 * 0.075) / 2 = ?
IT IS A 6 MONTH LOAN, AND THE CORRECT ANSWER IS $125.94
Sorry -- I had a typo in the problem above. It's 0.0775
You're right.
(3250 * 0.0775) / 2 = 125.94
To find the simple interest due on a loan, you need to calculate a few things: the principal amount (loan amount), the interest rate, and the time duration. In this case, the principal amount is $3250, the interest rate is 7.75%, and the time duration is six months.
Step 1: Convert the interest rate to a decimal form.
To convert the interest rate to a decimal form, divide it by 100. In this case, 7.75% divided by 100 gives us 0.0775.
Step 2: Calculate the simple interest.
Simple interest can be calculated using the formula:
Simple Interest = Principal Amount × Interest Rate × Time Duration
Substituting the given values:
Simple Interest = $3250 × 0.0775 × 6/12
= $3250 × 0.03875
= $126.03 (rounded to two decimal places)
Therefore, the simple interest due on a six-month loan of $3250 at an interest rate of 7.75% is approximately $126.03.