Answer:
$61.63
Explanation:
The simple interest on a loan is calculated using the formula:
[tex]\text{Simple Interest}=\frac{PRT}{100}\text{ where }\begin{cases}P=\text{Principal} \\ R=\text{Rate (in \%)} \\ T=\text{Time (in years)}\end{cases}[/tex]From the given problem:
• The principal, P = $2,900
,• The annual simple interest rate = 8.5%
,• Time = 3 months.
Note that the Time has to be in years, so we convert:
[tex]T=3\text{ months}=\frac{3}{12}\text{ years}[/tex]Substitute all the values into the formula:
[tex]\begin{gathered} \text{Simple Interest}=\frac{2900\times8.5\times\frac{3}{12}}{100} \\ =29\times8.5\times\frac{1}{4} \\ =\$61.63 \end{gathered}[/tex]The simple interest due is $61.63 (correct to the nearest cent).
