Video Transcript
Find the simple interest earned in a
savings account given that 552 dollars is deposited for seven months with an interest rate
of 16.5 percent per year.
The amount of simple interest can be
calculated using the formula 𝐼 equals 𝑃 multiplied by 𝑅 multiplied by 𝑇. 𝐼 is the amount of interest. 𝑃 is the principal amount, in this case,
the amount deposited. 𝑅 is the interest rate written as a
decimal. And 𝑇 is the amount of time. In this question, the amount deposited
was 552 dollars. So, 𝑃 equals 552. The interest rate was 16.5 percent per
year. We can convert any percentage into a
decimal by dividing by 100. This means that the value of 𝑅 is
0.165.
The interest rate was per year, and we
deposited the amount for seven months. As there are 12 months in a year, the
time in this case is equal to seven twelfths. We can, therefore, calculate the simple
interest by multiplying 552 by 0.165 by seven twelfths. This is equal to 53.13. The amount of interest earned is 53
dollars and 13 cents.
