Problema Solution
Karen's Katering borrows $4,500, at 8.5% interest, for 260 days. If the bank uses the exact interest method, how much interest will the bank collect? (Round to the nearest cent)
Answer provided by our tutors
Interest found using a 365-day year is called exact interest
P = $4,500
r = 0.085 or 8.5%
t = 260 days = 260/365 years
I = P*r*t
I = 4500*0.085*(260/365)
I = $272.47
The bank will collect $272.47 interest.