   Chapter 10.I, Problem 15RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Use the exact interest method (365 days) and the ordinary interest method (360 days) to compare the amount of interest for the following loans.Principal Rate(%) Time(days) Exact Interest Ordinary Interest $50,490 9 1 4 .69 _________ _________ To determine To calculate: The amount of interest accrued by using the ordinary method and the exact method on a principle amount of$50,490 at a rate of interest of 914% and over a period of time of 69 days.

Explanation

Given Information:

The principle amount of $50,490 is made for 69 days at a rate of interest of 914% . Formula used: The formula to compute the simple interest is, I=P×R×T Where, P is the principal amount, I is the amount of interest, R is the rate of interest and T is the time-period. The ordinary interest for the given loan is; Time=Number of days of a loan360 The exact interest for the given loan is; Time=Number of days of a loan365 Calculation: As given, the principle amount of$50,490 is made for 69 days at a rate of interest of 914%.

For ordinary interest for the given loan is;

Time=Number of days of a loan360

Thus, T=69360

For exact interest for the given loan is;

Time=Number of days of a loan365

Thus, T=69365

The amount of interest accrued from the issue of principal at a rate of interest of 914

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