Calculate the simple interest on a $1,000 investment at an interest rate of 10 percent a year after 2 months.(1 point)
Responses
$16.67
$16.67
$20,000
$20,000
$1,666.67
$1,666.67
$200
$200
To calculate the simple interest, we can use the formula:
Simple Interest = Principal * Interest Rate * Time
Given:
Principal = $1,000
Interest Rate = 10% per year (convert to decimal by dividing by 100: 10/100 = 0.1)
Time = 2 months (convert to years by dividing by 12: 2/12 = 1/6)
Plugging these values into the formula:
Simple Interest = 1000 * 0.1 * 1/6
= 100 * 1/6
= $16.67
Therefore, the simple interest on a $1,000 investment at an interest rate of 10 percent a year after 2 months is $16.67.