On sept 14 Jennifer went to bank to borrow 4400 at 10.25% interest Jennifer plans to repay the loan on january 27 assume the loan is on ordinary interest a. what interest will Jennifer owe on january 27?. Interest b. what is the total amount jennifer must repay at maturity? 4400*.1025*.3698630137=166.8082192
4400+166.81=4566.81 I still have the wrong answer where am I going wrong
Ordinary interest assumes a business year of 360 days. Exact interest uses
365 days per year.
a. I = Po*r*T = 4400*(0.1025/360)*135 =
$169.125
b. 4400 + 169.125 = $4569.13
To calculate the interest and total repayment amount, you need to use the formula for the simple interest:
Interest = Principal * Rate * Time
Where:
- Principal is the initial amount borrowed (4400)
- Rate is the interest rate expressed as a decimal (10.25% = 0.1025)
- Time is the duration in years until the loan is repaid
In this case, the loan period is given from September 14 to January 27, which is approximately 4.34 months.
Step 1: Convert the loan period to years
4.34 months ÷ 12 months/year = 0.3617 years
Step 2: Calculate the interest:
Interest = 4400 * 0.1025 * 0.3617
Interest = 161.09055
So, the interest Jennifer will owe on January 27th is approximately $161.09.
To find the total amount Jennifer must repay at maturity (including the principal and interest), you add the interest to the principal:
Total Repayment = Principal + Interest
Total Repayment = 4400 + 161.09
Total Repayment = $4,561.09
Hence, the total amount Jennifer must repay at maturity is approximately $4,561.09.
Please note that due to rounding, the values may slightly differ from the exact numbers you provided.