Problema Solution
A bank loans &10,000 to a business at 11.5% annual simple interest for 21 months. How much interest will the bank earn?
Answer provided by our tutors
P = $10,000 the principal
r = 0.115 or 11.5% the annual simple rate
t = 21 months = 21/12 years the time
I = the interest
I = P*r*t
I = 10000*0.115*(21/12)
I = $2,012.50
The bank will earn $2,012.50 in interest.