The simple interest that Oliver needs to pay is $ 90
Calculating Simple interest:
Simple interest is nothing but interest on a loan at a rate. The formula for Simple interest is given below
Simple interest, I = ptr
where p = principal amount
t = time period in years
r = rate of interest in decimals
Here we have
Oliver borrowed $1,500 to purchase a riding lawn mower
The rate of interest r = 12%
=> 12/100 = 0.12 (in decimals )
The time period given = 6 months = 0.5 years [ 6/12 = 0.5 ]
From the above formula,
The simple interest, I = ptr
=> I = $1,500(0.12) (0.5) = $ 90
Therefore,
The simple interest that Oliver needs to pay is $ 90
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