Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8 percent. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back interest on January 20:
I = PRT
I = 7,000 * 0.08 * 0.25
Sept. to Jan. is 4 months, not 3 months.
I = 7,000 * 0.08 * 0.33
To calculate the amount of interest Janet will pay back on January 20, we need to use the formula for calculating simple interest. The formula is:
Interest = Principal (loan amount) * Rate * Time
In this case, the principal is $7,000, the rate is 8 percent (or 0.08 as a decimal), and the time is the number of days between September 20 and January 20.
To calculate the time, we can use the total number of days in the period and divide it by 365, as there are typically 365 days in a year.
Now let's calculate the time difference between September 20 and January 20:
September has 30 days.
October has 31 days.
November has 30 days.
December has 31 days.
January has 20 days.
Total days = 30 + 31 + 30 + 31 + 20 = 142 days
Now let's calculate the interest:
Interest = $7,000 * 0.08 * (142/365)
Interest = $7,000 * 0.08 * 0.389
Interest = $218.48 (rounded to two decimal places)
Therefore, Janet will pay back approximately $218.48 in interest on January 20.