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Find the simple interest on a principal (present value) of $\ 2000$ at an annual interest rate of $3 \%$ for 8 months.
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Simple interest is calculated with $I=P V r t$. For this problem, the present value is $P V=2000$ and the interest rate is $r=0.03$. Since the interest rate is an annual rate, the time must be in years so $t=\frac{8}{12} .$ Put these values into the formula to give
$I=2000(0.03)\left(\frac{8}{12}\right)=40$
The simple interest is $\ 40$.
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