Chapter 10.II, Problem 19RE

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

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

# Use the ordinary interest method to compute the time for the following loans. Round answers to the next higher day when necessary.Principal Rate (%) Time Interest__________________________________________________________$7,400 9.6 _________$200

To determine

To calculate: The time period of loan using the ordinary interest method where principal invested is $7,400, rate of interest is 9.6% and interest amount is$200. Round the answer to next higher day if required.

Explanation

Given Information:

Principal invested is $7,400, rate of interest is 9.6% and interest amount is$200.

Formula used:

The formula to compute the time period of loan is,

T=IPR

Where, P is the principal amount, I is the amount of interest, R is the rate of interest and T is the time period.

Multiply T by 360 to compute the time period of loan in days.

Calculation:

Consider that interest amount is $200, principal invested is$7,400, rate of interest is 9.6%.

Simplify the rate of interest as,

9.6%=9.6100=0.096

As, T=IPR

Compute time period by substituting $200 for amount of interest,$7,400 for principal and 0

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