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

$I = P \cdot r \cdot t$

Where:

• $I$ is the interest,
• $P = 500$ is the principal amount,
• $r = 0.02$ is the annual interest rate (2%),
• $t = \frac{11}{12}$ is the time in years (11 months).

Substitute the values:

$I = 500 \cdot 0.02 \cdot \frac{11}{12}$

First, calculate step-by-step:

1. $0.02 \cdot 500 = 10$,
2. $\frac{11}{12} = 0.9167$,
3. $10 \cdot 0.9167 = 9.167$.

Round to the nearest cent:

$I = 9.17$

Final Answer:

Margo will pay $9.17 in interest.

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Do you want details or have questions?
Here are 5 related questions to expand your understanding:

1. How does the time period affect the interest calculation in simple interest?
2. What would the interest be if the loan duration was 1 year?
3. How would the calculation change for compound interest instead of simple interest?
4. What is the total amount Margo has to pay back, including the principal?
5. How does the interest rate affect the final interest amount?

Tip: Always convert months into a fraction of a year when dealing with interest calculations.