Problema Solution
Given interest of $11,900 at 6% for 50 days (ordinary interest), one can calculate the principal as __________.
Answer provided by our tutors
Ordinary interest is an interest that is calculated on a 360-day-a-year basis.
Let 'P' represent the principal.
I = $11,900 is the interest
r = 0.06 or 6% is the annual rate
t = 50 days = 50/360 years the time
The formula for the interest is:
I = P*r*t
11900 = P*0.06*(50/360)
P*0.06*(50/360) = 11900
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click here to see the equation solved for P
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P = $1,428,000.00
The principal is $1,428,000.00.