To calculate the interest for an amount of $1,500.00 over 4 months at an annual interest rate of 6.75%, follow these steps:
-
Convert annual interest rate to a decimal: \[ 6.75% = \frac{6.75}{100} = 0.0675 \]
-
Determine the monthly interest rate: Since the annual rate is for 12 months, divide by 12: \[ \text{Monthly interest rate} = \frac{0.0675}{12} \approx 0.005625 \]
-
Calculate the number of months: You’re interested in 4 months.
-
Use the formula for interest: The formula for calculating interest is: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] In this case: \[ \text{Interest} = 1500 \times 0.0675 \times \frac{4}{12} \]
-
Calculate the interest: \[ \text{Interest} = 1500 \times 0.0675 \times \frac{1}{3} \] \[ \text{Interest} = 1500 \times 0.0675 \times 0.3333 \approx 1500 \times 0.0225 = 33.75 \]
So, the interest on $1,500.00 for 4 months at an annual interest rate of 6.75% is approximately $33.75.