Posted by Angie on .
On September 7, Jennifer Rick went to Park Bank to borrow $3,200 at 11 2/3% interest. Jennifer plans to repay the loan on January 5. Assume the loan is on ordinary interest (ordinary interest uses 360 days a year).
1. interest Jennifer will owe on January 5
2. the total amount Jennifer must repay at maturity.
My calculations have given me answers of
1. $124.44 interest ($3200)(11 2/3%)(120/360)
2. $3,324.44 maturity value on Jan 5th
The website the problems are on indicates they are incorrect answers. So I am stuck.
I appreciate any insight I can get.
Simple Interest & Maturity Value -
1. I = Po*r*t,
2. Pt = 3200 + 122.37 = $332237.
I would use 120 days if the maturty date had been Jan. 7th.