Question

Question #3a28b

Answer 1

Simple interest = `18.75`
Compound interest = `18.87`

Explanation:

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

Let's look at both:
Simple interest

`SI = (PRT)/100`

`SI = (500xx2.5 xx18)/(100xx12)" 18 months" =18/12 years`

`SI = 18.75`

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

Compound interest

`"Full Amount" = P(1+R/100)^n`

`A = 500(1.025)^(3/2)" 18 months"= 1 1/2 yrs = 3/2`

`A = 518.57` This is the full amount.

Interest = `518.87 -500 = 18.87`