THE PRINCIPAL IS BORROWED AT SIMPLE INTREST RATE OF R FOR A PERIOD OF TIME t. Find the simple interest rate owned for the time use of the money. Assume 360 days in a year.
P=$5000, R=8.5% t =9 months.
I = PRT
I = 5000 * 0.085 * 0.75
To find the simple interest rate, we can use the formula:
Simple Interest = (Principal * Rate * Time) / 100
Given:
Principal (P) = $5000
Rate (R) = 8.5%
Time (t) = 9 months
First, let's convert the time from months to years as the interest rate is usually quoted annually. Since there are 12 months in a year, we divide the number of months by 12:
t = 9 months / 12 months/year = 0.75 years
Now, substitute the values into the formula:
Simple Interest = (Principal * Rate * Time) / 100
= ($5000 * 8.5% * 0.75) / 100
= ($5000 * 0.085 * 0.75) / 100
= $318.75 / 100
= $3.1875
Therefore, the simple interest owned for the use of the money is $3.1875.