   Chapter 10.II, Problem 8TIE ### 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

# Using the ordinary interest method, what is the rate of interest on a loan of $25,000 for 245 days if the amount of interest is$1,960? Round your answer to the nearest hundredth of a percent.

To determine

To calculate: The rate of interest using the ordinary interest method where principal invested is $25,000, time period is 245 days and interest amount is$1,960.Also round the answer to the nearest hundredth of a percent.

Explanation

Given Information:

Principal invested is $25,000, time period is 245 days and interest amount is$1,960.

Formula used:

Compute the time using the ordinary interest method,

Time=Number of days of a loan360

The formula to compute the principal amount is,

P=IRT

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

Calculation:

Consider the interest amount is $1,960, principal invested is$25,000, time period is 245 days

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