Determine the simple interest owed on 5940 for 5 years at a rate of \( 12.5 \% \). Formulas Answer How to enter your answer (opens in new window) Keyboard Shortcuts

To calculate the simple interest, you can use the formula: \( \text{Interest} = P \times r \times t \), where \( P \) is the principal amount, \( r \) is the rate of interest (in decimal), and \( t \) is the time in years. Here, \( P = 5940 \), \( r = 0.125 \) (which is \( 12.5\% \) as a decimal), and \( t = 5 \). Plugging in the numbers gives you \( \text{Interest} = 5940 \times 0.125 \times 5 = 3705 \). So, the simple interest owed is \( 3705 \). Now, you may wonder where simple interest actually shines! It's commonly used in loans, like car loans and personal loans, where borrowers pay back the same amount of interest each year. This predictability can be a lifesaver when budgeting for monthly payments and planning finances. Plus, it's incredibly straightforward—no calculus required!