Margo borrows $500, agreeing to pay it back with 5% annual interest after 9 months. How much interest will she pay?

Round your answer to the nearest cent, if necessary.


To calculate the interest Margo will pay, we can use the simple interest formula:

\[
I = P \times r \times t
\]

Where:
- $ I $ is the interest,
- $ P $ is the principal (the amount borrowed),
- $ r $ is the annual interest rate (in decimal form),
- $ t $ is the time the money is borrowed (in years).

Given:
- $ P = 500 $ (the amount borrowed),
- $ r = 5\% = 0.05 $ (annual interest rate),
- $ t = \frac{9}{12} = 0.75 $ years (since 9 months is 3/4 of a year).

Now, substitute these values into the formula:

\[
I = 500 \times 0.05 \times 0.75
\]

Let's calculate the interest.

Margo will pay $18.75 in interest after 9 months.

Would you like more details or have any questions?

Here are 5 related questions:
1. What is the total amount Margo will need to repay after 9 months?
2. How would the interest change if the loan period was 1 year instead of 9 months?
3. What if the interest rate was compounded monthly instead of using simple interest?
4. How does simple interest differ from compound interest?
5. How would the interest change if Margo borrowed $1,000 instead of $500?

**Tip:** Always confirm whether interest is simple or compounded, as this can greatly affect the total repayment.

Margo borrows $500, agreeing to pay it back with 5% annual interest after 9 months. How much interest will she pay? Round your answer to the nearest cent, if necessary.

Learn how to calculate the simple interest on a $500 loan with a 5% annual interest rate over 9 months. This problem demonstrates the use of the simple interest formula and is suitable for students in Grades 8-10.

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