Chapter 11, Problem 1ES

To determine

To calculate: The amount of simple interest of the principal amount $\$500$ at the annual rate of $12\%$ for the time period of $2$ years by the use of excel.

Answer to Problem 1ES

Solution:

The amount of simple interest is $\$120$.

Explanation of Solution

Given Information:

The principal amount is $\$500$, the annual rate is $12\%$, and the time period is $2$ years.

Formula Used:

The simple interest formula,

$\begin{array}{c}\text{Interest}=\text{principal}\times \text{rate}\times \text{time}\\ I=PRT\end{array}$

Calculation:

Consider that the principal amount is $\$500$, the annual rate is $12\%$, and the time period is $2$ years.

Use excel as below,

Step 1: Open excel and label the cell A1 as principal, label the cell B1 as Annual rate, label the cell C1 as Time and label the cell D1 as the Interest. And, write the corresponding data as provided in row 2 as below,

Step 2: Go to the cell D2 and write the formula as below,

=A2*(B2/100)*C2

Step 3: Press enter.

The value obtained as,

Thus, the amount of simple interest is $\$120$.