Question

calculating interest accrued on $75 and $1,000 at 3.75% APR

Answer 1

To calculate the interest accrued on a principal amount at a given annual percentage rate (APR), you can use the formula:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

Here:
- Principal is the initial amount of money (in this case, $75 and $1,000).
- Rate is the annual interest rate (in decimal form, so 3.75% becomes 0.0375).
- Time is the duration of time the money is invested or borrowed, expressed in years.

Let's calculate the interest accrued for both amounts for one year.

1. **For $75:**

\[
\text{Interest} = 75 \times 0.0375 \times 1 = 2.8125
\]

So, the interest accrued on $75 at a 3.75% APR for one year is **$2.81** (rounded to two decimal places).

2. **For $1,000:**

\[
\text{Interest} = 1000 \times 0.0375 \times 1 = 37.5
\]

So, the interest accrued on $1,000 at a 3.75% APR for one year is **$37.50**.

If you need to calculate interest for a different time period, simply adjust the time in the formula accordingly.