Exercise 21 Page 173

If we borrow money from a bank, we pay the bank interest for the use of their money. Similarly, if we have an unpaid balance on a credit card, we also pay interest to the credit card company. To calculate the interest I, we use the simple interest formula. I= p r t, where... I& =Interest p& = Principal r& = Annual interest rate t& = Time (in years)We are given that the loan amount is $ 175.80, the interest rate is 12 %, and the time is 8 months. We want to find the simple interest paid to the nearest cent. Keep in mind that 8 months represent 812 of a year and that 12 % is written in decimal form as 0.12. p= 175.80, r= 0.12, t= 8/12 To calculate the interest, let's substitute these values into the simple interest formula and evaluate the right-hand side.

I=prt

SubstituteValues

Substitute values

I= 175.80( 0.12)( 8/12)

Multiply

Multiply

I=21.096(8/12)

NumToDivByOne

a=a/1

I=21.096/1(8/12)

MultFrac

Multiply fractions

I=21.096* 8/1* 12

Multiply

Multiply

I=168.768/12

CalcQuot

Calculate quotient

I=14.064

RoundDec

Round to 2 decimal place(s)

I≈ 14.06

The simple interest paid is about $ 14.06.