Chapter SH, Problem 7.7.4EP

To determine

To calculate:To find the simple interest to the nearest cent

Answer to Problem 7.7.4EP

Simple interest is $\$63.75$

Explanation of Solution

Given information: $\$750$ at $4\frac{1}{4}\%$ for $2$ years

Formula used:

Simple interest is calculated as

  $SI=\frac{P\times R\times T}{100}$

Where,

  $P=$ Principal

  $R=$ Rate of Interest

  $T=$ Time in years

Calculation:

Given that $\$850$ at $6\%$ for $2$ years

  $\begin{array}{l}P=\$750\\ R=4\frac{1}{4}\%=\frac{17}{4}\%\\ T=2years\end{array}$

Simple Interest is calculated as

  $SI=\frac{P\times R\times T}{100}$

Substituting the values,

  $\begin{array}{l}SI=\frac{750\times \raisebox{1ex}{$17$}\!\left/ \!\raisebox{-1ex}{$4$}\right.\times 2}{100}\\ SI=\frac{750\times 17\times 2}{100\times 4}\\ SI=63.75\end{array}$

Conclusion:

Hence, simple interest is $\$63.75$