A problem on simple interest

Interest is a fee paid on borrowed assets. It is the price paid for the use of borrowed money, or, money earned by deposited funds.Assets that are sometimes lent with interest include money, shares, consumer goods through hire purchase, major assets such as aircraft, and even entire factories in finance lease arrangements. The interest is calculated upon the value of the assets in the same manner as upon money. Interest can be thought of as "rent of money". For example, if you want to borrow money from the bank, there is a certain rate you have to pay according to how much you want loaned to you.

Simple interest is calculated only on the principal amount, or on that portion of the principal amount which remains unpaid.

The amount of simple interest is calculated according to the following simple interest formula:

Let's see a problem on this from 8th grade math worksheets

Question:-

What is the interest earned on # 97500 when rate of interest is 8% and for 5 months?

Answer:-

Here is the solution from answers to math problems



This problem based on simple interest.

The formula for simple interest is

    p x T x R
I= ------------
       100

p= principle=$97500

R=rate of interest =8%

T=Time of year=5 months
=5/12 in years

I=interest amount

We have to put these values in formula

  97500 x 8 x 5
I= --------------
     100 x 12

     3900000
I = ----------
      1200

 I=3250

So the total interest earned on $97500 is $3250.

This is a part of elementary algebra practice .