example 4 check your understanding: how much simple interest is earned on $4,000 in 3 1/2 years at an…

example 4 check your understanding: how much simple interest is earned on $4,000 in 3 1/2 years at an interest rate of 1.2%?

example 4 check your understanding: how much simple interest is earned on $4,000 in 3 1/2 years at an interest rate of 1.2%?

Answer

Explanation:

Step1: Identify the formula

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years.

Step2: Convert the interest rate to decimal

The annual interest rate $r = 1.2%=0.012$.

Step3: Identify the principal and time

The principal $P = 4000$ and the time $t = 3\frac{1}{2}=\frac{7}{2}=3.5$ years.

Step4: Calculate the simple interest

Substitute the values into the formula: $I=Prt = 4000\times0.012\times3.5$. $I = 4000\times0.012\times3.5=168$.

Answer:

$168$