We are going to find the simple interest of $8000, for 2.5 years, at 4.25%. We remember that the formula for the simple interest is given by:
[tex]I=Prt[/tex]Where P represents the principal value, r the interest rate, and t the time in years. For finding the simple interest, we will replace the values given onto the formula:
[tex]I=(8000)\cdot(0.0425)\cdot(2.5)[/tex]Given that 4.25% is equivalent to the value 0.0425, and we obtain:
[tex]\begin{gathered} I=340\cdot2.5 \\ =850 \end{gathered}[/tex]This means that the simple interest is $850.
