A friend asks to borrow $250 for 120 days and agrees to pay 2.5% simple interest every 30 days. how much interest will you earn? give your answer in dollars to the nearest dollar.

Answer :

$6.25 of interest will be earned every 30 days.

Given,

Borrowing amount = $250

Simple interest = 2.5%

No. of days = 30 days

A month equals 30 days and so earning due to interests will be only effective after each 30th day. The simple interest formula is used here in order to calculate the interest.

[tex]I=\frac{P*R*T}{100}[/tex]

Here,

P -  borrowed money.

R -  simple interest rate.

T - no. of periods.

I -  interested gain due to borrowed money.

So, if P = $250, R = 2.5%, and T = 1, then the interest earned is:

[tex]I= \frac{(250)*(2.5)*(1)}{100}[/tex]

[tex]I=\frac{625}{100}[/tex]

[tex]I= 6.25[/tex]

Hence, $6.25 of interest will be earned every 30 days.

To learn more about interest here:

https://brainly.com/question/25845758

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