Answer :
Sure, let's break this down step-by-step:
1. Identify the Principal Amount (P):
The principal amount is the initial amount of money that you have, which in this case is [tex]$10,000. 2. Identify the Annual Interest Rate (R): The annual interest rate is 5%. To use it in calculations, we convert it into a decimal by dividing by 100: \[ R = \frac{5}{100} = 0.05 \] 3. Convert Time into Years (T): The time given is 15 months. To convert this into years, we divide by 12 (since there are 12 months in a year): \[ T = \frac{15}{12} \approx 1.25 \text{ years} \] 4. Calculate Simple Interest (I): The formula for calculating simple interest is: \[ I = P \times R \times T \] Substituting the given values into the formula: \[ I = 10000 \times 0.05 \times 1.25 \] Performing the multiplication step-by-step: \[ 10000 \times 0.05 = 500 \] \[ 500 \times 1.25 = 625 \] Therefore, the simple interest earned over 15 months with a principal of $[/tex]10,000 at an annual interest rate of 5% is $625.
1. Identify the Principal Amount (P):
The principal amount is the initial amount of money that you have, which in this case is [tex]$10,000. 2. Identify the Annual Interest Rate (R): The annual interest rate is 5%. To use it in calculations, we convert it into a decimal by dividing by 100: \[ R = \frac{5}{100} = 0.05 \] 3. Convert Time into Years (T): The time given is 15 months. To convert this into years, we divide by 12 (since there are 12 months in a year): \[ T = \frac{15}{12} \approx 1.25 \text{ years} \] 4. Calculate Simple Interest (I): The formula for calculating simple interest is: \[ I = P \times R \times T \] Substituting the given values into the formula: \[ I = 10000 \times 0.05 \times 1.25 \] Performing the multiplication step-by-step: \[ 10000 \times 0.05 = 500 \] \[ 500 \times 1.25 = 625 \] Therefore, the simple interest earned over 15 months with a principal of $[/tex]10,000 at an annual interest rate of 5% is $625.
