Question
Given the following values, use the simple interest formula
Round to the nearest hundredth of a percent.
Round to the nearest hundredth of a percent.
Ask by Summers Warner. in the United States
Mar 30,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The interest rate
Solution
-
Convert the time from months to years. Since there are 12 months in a year,
-
The simple interest formula is
-
Substitute the given values:
-
Solve for
: -
Compute the denominator:
-
Now, calculate
: -
Convert
into a percentage:
Thus, the remaining variable is
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Simplify this solution The Deep Dive
To find the interest rate
First, convert the time from months to years since the rate is expressed in years. There are 12 months in a year, so:
Now plug in the values:
To express the interest rate as a percentage, we multiply by 100:
Now you have the interest rate rounded to the nearest hundredth of a percent!
In the history of finance, the concept of interest dates back thousands of years to ancient civilizations like the Babylonians and Mesopotamians, who would charge interest on loans in grain or silver. Fast forward to today, and the principles remain, shaped by centuries of evolving economic systems!
If you’re calculating simple interest frequently, make sure to remember that timing matters! A common mistake is not converting time units properly. Always check whether you’re using months, days, or years and convert to the correct unit for a precise calculation!
