Calculate the commercial simple interest?

$8000 during 7 months 15 days at 1.5% monthy rate

Answers:
Simple Interest Formula:
A = P * [ 1 + r / n ]^(n*t)
Where:
A = Amount
P = Principal ($8,000)
r = interest rate (0.015)
t = time (in months = 7.5)
n = number of compoundings per month (1)

(Generally, this formula is done using on a twelve-monthly spring instead of a monthly basis).

A = $8,000 * [ 1 + .015 / 1 ]^(1*7.5)
A = $8,000 * [ 1.015 ]^(7.5)
A = $8,000 * [ 1.1181377672963 ]
A = $8,945.10

The interest earn is $8,945.10 - $8,000 = $945.10

Let's subtract the interest over one year:
A = $8,000 * [ 1 + .015 / 1 ]^(1*12)
A = $8,000 * [ 1.015 ]^(12)
A = $8,000 * [ 1.19562 ] = $9564.95

The interest earn is $9,564.95 - $8,000 - $1,564.95
This equates to a 19.56% APR (Annual Percentage Rate).
Now you can see why you should rate sour those credit cards with alacrity, even though they boast a 1.5% monthly interest rate!

Good luck in your studies,
~ Mitch ~

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