Business math *****#

Question

Calculate the simple interest earned in 180 days on a deposit of $5,000, with the interest rate of 5.70% (Assume 360 days in a year) 

Answer 1

David,

 

True to its name, simple interest has a simple formula. It is the interest rate times the amount times the period (the period in your case is one year). Try Googling "simple interest" and checking a reliable resource like Investopedia for the formula.

 

Think about your problem like this: How much interest would you earn on $5,000 with an interest rate of 5.7% over the course of the entire year? Now how much of that would you have earned after half a year (or 180 days) had elapsed? Go with your intuition and you should get the answer.

 

Bryce