Calculate the simple interest due (in dollars) on a 3-month loan of $2,700 if the annual simple interest rate is 5.5%. Round to the nearest cent. (See Example 2 in this section.)

To calculate the simple interest due on a loan, we can use the simple interest formula:

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

Where:
- $ I $ is the interest,
- $ P $ is the principal (the initial loan amount),
- $ r $ is the annual interest rate (expressed as a decimal),
- $ t $ is the time the money is borrowed for, in years.

### Given:
- Principal $ P = 2700 $ dollars,
- Annual interest rate $ r = 5.5\% = 0.055 $,
- Time $ t = 3 \text{ months} = \frac{3}{12} = 0.25 \text{ years} $.

### Now calculate the interest:

\[
I = 2700 \times 0.055 \times 0.25 = 37.125
\]

The simple interest due on the loan is **$37.13** (rounded to the nearest cent).

Would you like more details or have any questions?

Here are 5 related questions to expand on this:
1. How would the interest change if the loan term were 6 months?
2. What is the total amount due after the 3 months, including interest?
3. How does the formula change if compounded interest is used instead of simple interest?
4. How would the interest change if the rate was 7% instead of 5.5%?
5. What would be the interest on a loan of $5,000 at the same rate for 3 months?

**Tip:** Always ensure the time is in years when using the simple interest formula!

Calculate the simple interest due (in dollars) on a 3-month loan of $2,700 if the annual simple interest rate is 5.5%. Round to the nearest cent.

Learn how to calculate simple interest for a 3-month loan of $2,700 at an annual interest rate of 5.5%. This detailed solution explains the use of the simple interest formula, with time conversion and percentage application. Ideal for students in Grades 6-8.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation