Answer: $108.75
Given:
P = $5000
r = 8.7% = 0.087
t = 3 months
We will use the formula for the simple interest rate to solve for the interest penalty
[tex]I=\text{Prt}[/tex]
Substitute the given values to the formula and we will get:
[tex]\begin{gathered} I=\text{Prt} \\ I=(5000)(0.087)(\frac{3}{12}) \\ I=108.75 \end{gathered}[/tex]
Therefore, the interest penalty is $108.75
