Question

Use the following information.

Simple interest is calculated using the formula $I=prt$, where $p$represents the principal in dollars, $r$represents the annual interest rate, and $t$represents the time in years. Find the simple interest $I$given each of the following values.

$p=\$5000,r=3.75\%,t=10years$

Short answer

Simple interest is $I=\$1875$

Step-by-step solution

- Meaning of given formula I=prt

$prt$implies product of principle value, annual interest rate and time

So, interest rate can be evaluated by multiplying these three values

- Substitute given values

Substitute $\$5000$ for $p$,$3.75\%$ for r and 10 for t into given expression

$I=5000\times 3.75\%\times 10$

- Simplify 5000×3.75%×10

Substitute$\frac{3.75}{100}$ for $3.75\%$

$\begin{array}{c}I=5000\times \frac{3.75}{100}\times 10\\ =\frac{187500}{100}\\ =1875\end{array}$

Thus, simple interest is $I=\$1875$