00:01
We're looking to calculate our total amount that we owe if we have borrowed 8 ,000 at 8 % per year using simple interest for 10 months.
00:10
So normally we would just plug in our principal, our rate, and our time, and we press under, and that would be the answer.
00:19
But the thing is, our rate right here, is in years, but our time here is in months.
00:26
Those don't match, so we need to make them match.
00:29
We can either choose to turn months into years or we can choose to turn the percentage per year into a percentage per month.
00:39
Either way, it's going to come out to be the same thing.
00:42
So i know our principle is 8 ,000.
00:47
And let's turn our rate from 8 % a year.
00:55
One year is 12 months.
01:00
So 8 % per year will be 0 .08.
01:04
Divided by 12, which comes out to be a decimal that repeats forever...