A bank lent Gloria Masters $26,000 at an annual simple interest rate of 9.2%. The period of the loan was 9 months. Find the simple interest due on the loan.

Question

Quizplus · Accepted Answer

We can use the formula for simple interest:

I = PRT

where:

I = interest 
P = principal (amount borrowed) 
R = interest rate (as a decimal) 
T = time (in years)

Since the period of the loan is given in months, we need to convert it to years:

9 months = 9/12 years = 0.75 years

Plugging in the values given, we get:

I = 26000 × 0.092 × 0.75 = $1794

Therefore, the simple interest due on the loan is $1794. So, the best choice is (A).

A Bank Lent Gloria Masters $26,000 at an Annual Simple