Question

Marie took out a loan for 7
months and was charged simple interest at a rate of 5.5%
. If the amount of the loan was $425
, what is the amount of interest she had to pay?

Answer 1

To calculate the simple interest charged on the loan, you can use the formula:

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

where:
- \( I \) is the interest,
- \( P \) is the principal amount (the amount of the loan),
- \( r \) is the annual interest rate (as a decimal),
- \( t \) is the time the money is borrowed for (in years).

Given:
- \( P = 425 \)
- \( r = 5.5\% = 0.055 \)
- \( t = \frac{7 \text{ months}}{12 \text{ months/year}} = \frac{7}{12} \)

Now, plug in the values into the formula:

\[
I = 425 \times 0.055 \times \frac{7}{12}
\]

Let's calculate it step-by-step:

1. Calculate \( \frac{7}{12} \):

\[
\frac{7}{12} \approx 0.5833
\]

2. Now, calculate the interest:

\[
I = 425 \times 0.055 \times 0.5833
\]

3. Perform the multiplications:

First, calculate \( 425 \times 0.055 \):

\[
425 \times 0.055 = 23.375
\]

Now multiply that result by \( 0.5833 \):

\[
23.375 \times 0.5833 \approx 13.655
\]

Therefore, the amount of interest Marie had to pay is approximately:

\[
\boxed{13.66}
\]