The interest accrued on $7,500 at 6% for 90 days is:
A)$450.00.
B)$37.50.
C)$112.50.
D)$11.25.
E)$1,800.00.

Question

Quizplus · Accepted Answer

First, we must convert the interest rate from 6% per year to its equivalent interest rate per 90-day period. There are four 90-day periods in a year, so we can use the formula:

interest rate per 90-day period = (annual interest rate) / 4
= 6% / 4
= 1.5%

Next, we can use the formula for simple interest:

interest = (principal) x (interest rate) x (time)

Plugging in the given values, we get:

interest = ($7,500) x (0.015) x (90/365)
= $112.50

Therefore, the interest accrued on $7,500 at 6% for 90 days is $112.50. The best choice is (C).

The Interest Accrued on $7,500 at 6% for 90 Days