To calculate interest on a 90-day, 5%, $2,100 note, you would use what equation?

To calculate the interest on a note, you can use the formula for simple interest, which is the principal amount multiplied by the interest rate and the time period (expressed in terms of a year). In this scenario, the principal is $2,100, the interest rate is 5%, and the note duration is 90 days.

Within the context of this formula, it's common to express the time in days relative to a year. Since there are typically 360 days conventionally used in financial calculations, you calculate the interest for 90 days out of that 360-day year. Therefore, the equation effectively becomes:

Interest = Principal × Rate × Time

Here, the equation restructures to take the number of days into account:

Interest = $2,100 × 5% × (90 / 360)

This shows that the interest should be calculated based on the fraction of the year represented by the 90 days, which is why you multiply by 90 and divide by 360. The correct formulation captures this essential aspect of time in the simple interest calculation. Thus, the choice that expresses this calculation accurately is indeed the one that combines these factors appropriately.