Problema Solution
Using the ordinary interest method, find the amount of interest on a loan of $5,000 at 11 % interest, for 284 days
Answer provided by our tutors
"Ordinary Interest" uses 360 (instead of 365) as the number of days in a year when computing simple interest.
P = $5,000
r = 0.11 or 11% interest
t = 284 days
t = 284/365 years
I = the amount of interest
The formula for interest is:
I = P*r*t
I = 5,000*0.11*(284/365)
I = $427.95
The interest is $427.95.