The formula for calculating simple interest (SI) is:

$\text{SI} = P \times r \times t$

where:

• $P$ is the principal (initial amount borrowed),
• $r$ is the annual interest rate (in decimal form),
• $t$ is the time in years.

Step 1: Convert the given values

1. Principal, $P$: $9000$
2. Interest rate, $r$: $7.5\%$ or $0.075$
3. Time, $t$: $18$ months

To find the time in years, we convert 18 months into years: $t = \frac{18}{12} = 1.5 \text{ years}$

Step 2: Plugging into the Formula

$\text{SI} = 9000 \times 0.075 \times 1.5$

Step 3: Calculate

$\text{SI} = 9000 \times 0.075 \times 1.5 = 1012.5$

Result

The simple interest owed for the use of the money is $1,012.50.

Would you like further details, or have any questions?

Related Questions

1. How would the interest change if the rate increased to 8%?
2. What would the interest be if the loan term was only 12 months?
3. How is simple interest different from compound interest over the same period?
4. How does the interest change if the principal is increased to $10,000?
5. What would be the total amount to repay after 18 months?

Tip:

Always convert months to years when calculating simple interest over periods longer than a year.