How much simple interest would be paid on a loan of $13,480 at 6% for 46 months?

Question

Round your answer to the nearest cent.  Thanks for your help.

Answer 1

Simple interest has the formula I = P*R*T where P is the principal, the amount you start with, R is the annual rate of interest, and t is the time in years. Your P and R are straight forward but your time is given in months and must be converted into years, so divide by 46/12 and get 3.8333333. So plug it in the formula to get

 

I = 13480*.06*3.833333333 = $3100.40

 

Hope this helps