To calculate the simple interest, we use the formula:

$I = P \times r \times t$

Where:

• $I$ is the interest,
• $P$ is the principal,
• $r$ is the annual interest rate, and
• $t$ is the time in years.

Step-by-Step Calculation:

1. Convert the time into years:
   Since the time is given in months (15 months), we need to convert it into years.
   $t = \frac{15}{12} = 1.25 \text{ years}$

2. Convert the interest rate into decimal form:
   The interest rate is 4.5%, so we convert this to a decimal by dividing by 100:
   $r = \frac{4.5}{100} = 0.045$

3. Apply the formula: $I = 4000 \times 0.045 \times 1.25$ $I = 4000 \times 0.05625$ $I = 225$

Thus, the simple interest owed is $225.

Summary:

The interest owed for borrowing $4000 at a 4.5% interest rate for 15 months is $225.

Would you like more details on the calculation or further questions?

Here are some related questions you might find useful:

1. How does the simple interest formula differ from compound interest?
2. What is the impact of changing the time period on the interest owed?
3. How would the interest change if the interest rate was doubled?
4. What if the loan was for 20 months instead of 15? How would the interest change?
5. How do different methods of time calculation (like using 360 or 365 days) affect the results?

Tip: Always remember to convert time into years when working with interest rates that are annual, especially when the time is given in months.