Remember that the formula for simple interest is:
[tex]I = Prt[/tex]
- [tex]I[/tex] is the interest earned
- [tex]P[/tex] is the principal amount invested
- [tex]r[/tex] is the interest rate, represented as a decimal
- [tex]t[/tex] is the amount of time in years
Using information the problem gave us, we can say that the amount of interest earned after one year is:
[tex]I = (\$ 350)(0.06)(1) = \$ 21[/tex]
After 1 year, we will have earned $21. Remember though that we also need to find the amount we will earn after 4 months. Since there are 12 months in a full year, we can say that 4 mohts represents a third of a year. Thus, let's multiply our interest by one-third.
[tex]\$21 \cdot \dfrac{1}{3} = \$ 7[/tex]
After 4 months, we will have generated $7 and after one year we will have generated $21.
