Question #3a28b

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Answer 1 · 2016-08-15T10:45:33

Simple interest = $18.75$ $18.75$
Compound interest = $18.87$ $18.87$

The question does not indicate whether it is compound or simple interest.

Let's look at both:
Simple interest

$S I = \frac{P R T}{100}$ $SI = (PRT)/100$

$S I = \frac{500 \times 2.5 \times 18}{100 \times 12} 18 months = \frac{18}{12} y e a r s$ $SI = (500xx2.5 xx18)/(100xx12)" 18 months" =18/12 years$

$S I = 18.75$ $SI = 18.75$

It would be nice to have a unit of currency included as well.

Compound interest

$Full Amount = P {(1 + \frac{R}{100})}^{n}$ $"Full Amount" = P(1+R/100)^n$

$A = 500 {(1.025)}^{\frac{3}{2}} 18 months = 1 \frac{1}{2} y r s = \frac{3}{2}$ $A = 500(1.025)^(3/2)" 18 months"= 1 1/2 yrs = 3/2$

$A = 518.57$ $A = 518.57$ This is the full amount.

Interest = $518.87 - 500 = 18.87$ $518.87 -500 = 18.87$