Darius has a 6-month loan for . He must pay annual interest on the loan. Using the
formula for simple interest, Prt, where is interest owed, is the amount borrowed, is the
rate as a decimal, and is time in years, find the amount of interest owed by Darius after 6 months.


$140

To calculate the interest owed by Darius after 6 months, we can plug the values into the simple interest formula . Here, , (which is 5.6% as a decimal), and (since 6 months is half a year).

So, .

Therefore, Darius owes in interest.

Finding out how such simple interest calculations can weave into our daily lives can be quite fun! Just think about when you’re shopping for a car, or even if you decide to take a small personal loan. Understanding the cost of what you’re borrowing will help you make wiser financial decisions down the road. Imagine being able to compare offers based on just a few numbers!

For those intrigued by how interest began, the concept dates back to ancient Mesopotamia! People were already borrowing and lending goods and money using a type of interest as early as 3000 BC. It was a way to encourage lending and manage economic trade. Fast forward to today, and it’s a fundamental part of banking and finance, influencing everything from how we invest to the rates we pay on mortgages.