To solve this problem, we’ll use the simple interest formula:

$I = P \times r \times t$

where:

• $P = 465$ (the principal),
• $r = 2.75\% = 0.0275$ (the annual interest rate as a decimal),
• $t = 1.25$ years.

Step-by-Step Calculation

1. Substitute the values into the formula: $I = 465 \times 0.0275 \times 1.25$

2. First, calculate $465 \times 0.0275$: $465 \times 0.0275 = 12.7875$

3. Then multiply by $t = 1.25$: $12.7875 \times 1.25 = 15.984375$

4. Round to the nearest cent: $I \approx 15.98$

Answer

The correct answer is $15.98.

Would you like more details or have any questions?

Here are some related questions to explore further:

1. What is the difference between simple and compound interest?
2. How would the answer change if the interest rate were compounded annually?
3. What if the time were given in days instead of years?
4. How would you calculate simple interest if given monthly rates instead of annual rates?
5. How does simple interest apply in real-life financial situations?

Tip: Always convert percentage rates to decimals when using them in formulas.