Ali saved RM15,000 on 10 May 2014 in an account that offers r% simple interest per year. If the simple interest earned on 25 October 2014 is RM 120, find the value of r using exact time.
To find the value of r, we need to use the formula for simple interest:
Simple Interest = Principal (P) × Rate (r) × Time (t)
Given:
Principal (P) = RM15,000
Simple Interest = RM120
Let's calculate the time (t) in terms of the number of days between 10 May 2014 and 25 October 2014.
Number of days from 10 May 2014 to 25 October 2014 = 168 days
We divide this by 365 to convert it to years:
Time (t) = 168 days ÷ 365 days/year
Time (t) ≈ 0.4603 years
Now we can solve for the rate (r):
RM120 = RM15,000 × r × 0.4603
Dividing both sides of the equation by (RM15,000 × 0.4603):
120 ÷ (15,000 × 0.4603) = r
Simplifying:
r ≈ 0.018
Therefore, the value of r (the interest rate) is approximately 0.018 or 1.8%.