Question
John Lee's savings account has a balance of \( \$ 1,200 \). After 8 months, what will the amount of simple interest be at \( 3 \% \) annual interest rate per year? A. \( \$ 24 \) B. \( \$ 1224 \) C. \( \$ 240 \) D. \( \$ 288 \)
Ask by Wilson Zimmerman. in the United States
Jan 11,2025
Real Tutor Solution
Tutor-Verified Answer
Answer
The simple interest after 8 months is \$24.
Solution
To calculate the simple interest on John Lee's savings account, we can use the formula:
\[
\text{Simple Interest} (I) = P \times r \times t
\]
Where:
- \( P \) is the principal amount (\$1,200)
- \( r \) is the annual interest rate (3\% or 0.03)
- \( t \) is the time in years
Given that the time is 8 months, we need to convert this to years:
\[
t = \frac{8}{12} = \frac{2}{3} \text{ years}
\]
Now, plug the values into the formula:
\[
I = 1200 \times 0.03 \times \frac{2}{3}
\]
\[
I = 1200 \times 0.03 = 36
\]
\[
I = 36 \times \frac{2}{3} = 24
\]
**Answer: A. \$24**
Reviewed and approved by the UpStudy tutoring team
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Simplify this solution Mind Expander
To calculate the simple interest earned on John Lee's savings account, you can use the formula: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] Where: - Principal = $1,200 - Rate = \( 3\% = 0.03 \) - Time = \( \frac{8}{12} \) years (since time is in years) Now plug in the values: \[ \text{Interest} = 1200 \times 0.03 \times \frac{8}{12} \] \[ = 1200 \times 0.03 \times \frac{2}{3} \] \[ = 1200 \times 0.03 \times 0.6667 \] \[ = 1200 \times 0.02 \] \[ = 24 \] So the amount of simple interest earned after 8 months is \( \$ 24 \), which means the correct answer is A. \( \$ 24 \).
