Answer:
1. $1.5
2. $126
3. $630
Explanation:
1. The cost of the bike = $150.00
The amount saved in the bank, P = $25.00
The interest rate on the account, R = 3%
The number of years the amount is saved, t = 2 years
The simple interest earned, 'I', is given by the following formula;
[tex]Simple \ Interest, \ I = \dfrac{P \times R\times T}{100}[/tex]
Therefore;
[tex]I_2 = \dfrac{25 \times 3\times 2}{100} = 1.5[/tex]
The simple interest earned in two years, I₂ = $1.5
2. The cost of the television set, P = $700
The interest charged by the credit card, R = 18%
The number of years it takes to pay for the television, t = 1 year
∴ I = P×R×T/100
∴ I = $700 × 18 × 1/100 = $126
The interest paid after 1 year, I = $126
3. The cost of the new heater, P = $3,500
The interest rate for the loan to buy the heater, R = 9%
The duration of the loan = 24 months
The duration of the loan in years, t = 24 months × 1 year/(12 months) = 2 years
The interest on the loan, I = $3,500 × 9 × 2/(100) = $630
The interest on the loan, I = $630.
