Calculating Simple Interest for a Loan
To determine the simple interest, you can use the formula:
\[ \text{Interest} = P \times r \times t \]
where:
- \( P \) is the principal amount (the initial amount of money),
- \( r \) is the daily interest rate (as a decimal),
- \( t \) is the time the money is invested or borrowed for, in days.
From your image:
- \( P = $558 \),
- \( r = 0.047\% \) per day, which as a decimal is \( 0.00047 \) (divide by 100 to convert percentage to decimal),
- \( t = 3 \) months, and since we're assuming a 360-day year, each month has 30 days, so \( t = 3 \times 30 = 90 \) days.
Thus, the simple interest \( I \) is calculated as follows:
\[ I = 558 \times 0.00047 \times 90 \]
\[ I = 23.5218 \]
Now, rounding to the nearest cent gives us:
\[ I \approx $23.52 \]
The simple interest on $558 at 0.047% per day for 3 months is approximately $23.52.
