The chief business officer of plumbing supply company arranges a loan of $12,400, at $10 \frac { 1 } { 8 } \%$ interest for 29 months. Find the amount of interest. (Round to the nearest cent)

Question

Quizplus · Accepted Answer

To find the amount of interest, use the formula $I = PRT$, where $I$ is the interest, $P$ is the principal amount ($12,400), $R$ is the annual interest rate (expressed as a decimal), and $T$ is the time in years. The annual interest rate is $10 \frac{1}{8}\% = 10.125\%$, or 0.10125 when converted to a decimal. The time is 29 months, which is $\frac{29}{12}$ years. Plugging these values into the formula gives $I = 12400 \times 0.10125 \times \frac{29}{12}$, which equals approximately $3,034.13 when rounded to the nearest cent.

The Chief Business Officer of Plumbing Supply Company Arranges a Loan