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To calculate the interest earned on $617 at a 6% interest rate per year for 3 months, you can follow these steps:
Step 1: Convert the annual interest rate to a monthly rate. Since there are 12 months in a year, you can divide the annual interest rate of 6% by 12. 6% / 12 = 0.5% per month
Step 2: Calculate the interest earned for 3 months. Multiply the principal amount ($617) by the monthly interest rate (0.5%) and the number of months (3). Interest earned = $617 * 0.5% * 3 = $9.27
Therefore, the interest earned on $617 at a 6% interest rate per year for 3 months is $9.27.
In this scenario, the principal amount is $617, which is the initial amount of money. The interest rate is 6% per year, which means that for every $100, the lender would charge an additional $6 as interest for a year. However, since the given time period is 3 months, we need to adjust the interest accordingly.
To calculate the monthly interest rate, we divide the annual interest rate by 12 (the number of months in a year). In this case, the monthly interest rate is 0.5%.
To find the interest earned, we multiply the principal amount ($617) by the monthly interest rate (0.5%) and the number of months (3). This calculation gives us the interest earned, which is $9.27.
It's important to note that this calculation assumes simple interest, where the interest is only earned on the principal amount and does not compound over time.
