Remember that the formula for simple interest is:
[tex]I=prt[/tex]
Where I is the interest to paid, p is the loan, r is the interest rate (in decimal), and t is the time (in years).
A. We know that the interest rate for a loan of 9 months is 2.9%, but we need to convert that rate to decimal. To do that just divide the interest rate by 100%:
[tex] \frac{2.9}{100} =0.029[/tex]
Next, we are going to find the time t in years. Since the period of time is 9 months, we are going to dive by 12, the number of months in a year, to obtain the time in years:
[tex]t= \frac{9}{12} =0.75[/tex]
Now, we just need to replace the values in our formula to find the interest owned:
[tex]I=(900)(0.029)(0.75)=19.58[/tex]
We can conclude that the interest owed for a home improvement loan of $900 after 9 months is $19.58.
B. Similarly:
[tex]r= \frac{3.1}{100} =0.031[/tex]
[tex]t= \frac{18}{12} =1.5[/tex]
[tex]I=(2500)(0.031)(1.5)=116.25[/tex]
We can conclude that the interest owed for a home improvement loan of $2500 after 18 months is $116.25.
C. Similarly:
[tex]r= \frac{2.4}{100} =0.024[/tex]
[tex]t= \frac{6}{12} =0.5[/tex]
[tex]I=(5600)(0.024)(0.5)=67.2[/tex]
We can conclude that the interest owed for a home improvement loan of $5600 after 6 months is $67.2
