Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![**Simple Interest Calculation Exercise**
Calculate the amount of simple interest earned.
**Principal Amount:** $1,000
**Interest Rate:** 4%
**Time Period:** 7 years
Enter your answer in the box provided.
**Need Help?**
If you need assistance, click the "Read It" button for more information on how to calculate simple interest.
**Explanation:**
The simple interest formula used for this calculation is:
\[ \text{Simple Interest (SI)} = \frac{{P \times R \times T}}{100} \]
Where:
- \( P \) is the principal amount ($1,000),
- \( R \) is the rate of interest per annum (4%),
- \( T \) is the time period in years (7 years).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb020c391-051d-4df7-9efc-8e680de59ef9%2F1213a304-7cc6-4c9c-91a2-00c6fe2d364f%2F08q9eid.jpeg&w=3840&q=75)
Transcribed Image Text:**Simple Interest Calculation Exercise**
Calculate the amount of simple interest earned.
**Principal Amount:** $1,000
**Interest Rate:** 4%
**Time Period:** 7 years
Enter your answer in the box provided.
**Need Help?**
If you need assistance, click the "Read It" button for more information on how to calculate simple interest.
**Explanation:**
The simple interest formula used for this calculation is:
\[ \text{Simple Interest (SI)} = \frac{{P \times R \times T}}{100} \]
Where:
- \( P \) is the principal amount ($1,000),
- \( R \) is the rate of interest per annum (4%),
- \( T \) is the time period in years (7 years).
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