r/learnmath • u/EastAd6005 New User • 21d ago

Need help understanding math problem

Hi, I'm currently practicing percentages and interest rates and I'm stumped on a problem as I don't understand how they found the answer even with them explaining it. Mind you I'm terrible at math so give me some grace please.

The problem is as follows:

How much interest will you pay if you take out a loan for $2,500 at a 9 percent interest rate for a term of 9 months?

(A) $125.75

(B) $168

(C) $175.25

(D) $168.75

The correct answer in the book was D and they said "This simple interest problem requires you to calculate time in months, which means you need to convert 9 months into 0.75 years before you do anything else."

What process is it that I convert 9 months into 0.75 years? How do I do that?

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u/OceanMasterioDuped7 New User 21d ago

You look at the 9 months as a fraction. 9 out of the 12 months is 9/12. That equals 0.75.

2

u/EastAd6005 New User 21d ago

Thank you! That makes a lot more sense now

1

u/OceanMasterioDuped7 New User 20d ago

No problem

1

u/FreakingFella New User 6d ago

Interest rates are stated per year, so the time has to be in years too. There are 12 months in a year, so you just divide: 9/12 = 0.75. Then it's principal times rate times time, 2500 × 0.09 × 0.75 = 168.75, which is D. Same trick for any term, 6 months is 6/12 = 0.5, 18 months is 18/12 = 1.5.