Find the amount of simple interest on a loan of $2,500 at 4.44% interest for 12.75 months. (Round to the nearest cent)
A) $113.31
B) $2,617.94
C) $117.94
D) $121.87

Question

Quizplus · Accepted Answer

Simple interest can be calculated using the formula I = PRT, where I is the interest, P is the principal amount ($2,500), R is the rate of interest per period (4.44% or 0.0444), and T is the time the money is borrowed for in years (12.75 months or 1.0625 years). Plugging in the values: I = $2,500 * 0.0444 * 1.0625 = $117.94.

Find the Amount of Simple Interest on a Loan of $2,500