The formula for the simple interest I after an amount P is invested for period t at a simple interest rate r is:
[tex]I=P\cdot r\cdot t[/tex]In this problem, the simple interest annual rate is 8% = 0.08. But the period t of the investment is
t = 90 days = 3 months = (12/4) months = (1/4) year
And the rate is:
[tex]r=\frac{0.08}{\text{year}}=\frac{\frac{0.08}{4}}{\frac{\text{year}}{4}}=\frac{0.02}{t}[/tex]Then, using P = 175, the interest, in dollars, is:
[tex]I=175\cdot\frac{0.02}{t}\cdot t=175\cdot0.02=3.5[/tex]And the amount A, in dollars, in the account after that period is:
[tex]A=P+I=175+3.5=178.5[/tex]Answers:
Simple interest: $3.50
Ammount: $178.50
