Chapter 6.6, Problem 35HP

To determine

To find:Sabino mistake and correct it.

Answer to Problem 35HP

Sabino did a mistake that sabino did not converted months to years as above simple interest formula is used only when time is in years.

Explanation of Solution

Given information:

Principal amount $=\$2500$

Time $=18$ months.

Interest percent $=5.75\%$

Concept:

  $I=prt$

Where

  $I=$ Simple interest.

  $p=$ Principal amount

  $t=$ time in years.

  $r=$ Annual interest rate.

Calculation:

From given information

Principal amount $=p=\$2500$

Time $=t=18$ months.

We know

  $1$ year $=12$ months

Using that

We get

  $t=\frac{18}{12}=\frac{3}{2}$ years.

Interest percent $=R=5.75\%$

We know

Annual interest rate $=r=\frac{R}{100}$

  $\begin{array}{l}\Rightarrow r=\frac{5.75}{100}\\ \Rightarrow r=0.0575\end{array}$

On substituting values in above mentioned concept

We get

  $\begin{array}{l}I=prt\\ \Rightarrow I=\left(2500\right)\left(0.0575\right)\left(\frac{3}{2}\right)\\ \Rightarrow I=\$215.625\end{array}$

Therefore,

To the nearest cent, Simple interest $=I=\$215.63$

Therefore

On comparing above solution with Sabino solution

Sabino did a mistake that sabino did not converted months to years as above simple interest formula is used only when time is in years.