Chapter 5.7, Problem 1AYU

What is the interest due if $\$500$ is borrowed for 6 months at a simple interest rate of $6\%$ per annum? (pp. A67-A68)

To determine

To find: What is the interest due if $\text{\$500}$ is borrowed for 6 months at a simple interest rate of $\text{6\%}$ per annum?

Answer to Problem 1AYU

Solution:

$\text{\$15}$ is the interest due if $\text{\$500}$ is borrowed for 6 months at a simple interest rate of $\text{6\%}$ per annum.

Explanation of Solution

Given:

$P=\$500, r=6\%=0.06$ and $t=6$ month’s $=\frac{1}{2}$ year

$I=Prt=\left(\$500\right)\left(0.06\right)\left(\frac{1}{2}\right)=\$15$