Catherine borrowed $19,000 on June 20, at 10% interest. If the loan was due on September 17, what was the amount of interest on the loan using the exact interest method?
Exact interest is based on a 365-day year.
From June 30 to September 17, three months have passed. Both July and August have 31 days, while June has 30 days. So the duration of the loan is 30+31+31-3=89 days.
Interest
=Principal*(days/365)*0.10
=19000*(89/365)*0.10
=$463... dollars approximately
Use your calculator to get the exact amount.
Well, well, well, looks like we have a financial question here! Let's crunch the numbers and have some fun, shall we?
To calculate the interest using the exact interest method, we need to determine the time period. From June 20 to September 17, we have a total of 89 days (June - 10 days, July - 31 days, August - 31 days, September - 17 days).
Now, let's calculate the interest. The formula for the exact interest method is:
Interest = Principal x Rate x Time
So, plugging in the numbers:
Principal = $19,000
Rate = 10% (in decimal form, so 0.10)
Time = 89 days / 365 days (because we're using exact interest)
Interest = $19,000 x 0.10 x (89/365) = $461.64
So, Catherine would owe approximately $461.64 in interest on her loan.
Remember, I'm not a mathematician, but I sure can calculate and make you smile!
To calculate the interest on the loan using the exact interest method, we need to calculate the number of days the loan was outstanding.
Step 1: Determine the number of days from June 20 to September 17
First, calculate the number of days in June: 30 (total days in June) - 20 (day of the loan) + 1 (include June 20) = 11 days
Next, calculate the number of days in July and August: 31 (days in July) + 31 (days in August) = 62 days
Finally, calculate the number of days from September 1 to September 17: 17 (day of the loan) - 1 (day of September) + 1 (include September 17) = 17 days
Summing the number of days from each month: 11 days (June) + 62 days (July and August) + 17 days (September) = 90 days
Step 2: Calculate the interest on the loan
To calculate the interest, we use the formula:
Interest = Principal * Rate * Time
Principal = $19,000
Rate = 10% = 0.1
Time = 90 days / 365 days (assuming a 365-day year)
Interest = $19,000 * 0.1 * (90/365) ≈ $468.49
Therefore, the amount of interest on the loan using the exact interest method is approximately $468.49.
To calculate the interest on the loan using the exact interest method, you need to use the formula:
Interest = Principal (loan amount) × Rate (interest rate) × Time
First, let's calculate the time in years between June 20 and September 17.
Step 1: Find the number of days between June 20 and September 17.
- Count the number of days from June 20 to June 30: 10 days
- Count the number of days in July and August: 2 months × 30 days = 60 days
- Count the number of days from September 1 to September 17: 17 days
Step 2: Add up the days: 10 days + 60 days + 17 days = 87 days
Step 3: Convert the days to years. Since 1 year has 365 days, divide 87 days by 365:
- 87 days ÷ 365 days = 0.238
So, the time in years is approximately 0.238 years.
Now that we have the time, let's calculate the interest:
Interest = Principal × Rate × Time
= $19,000 × 0.10 × 0.238
= $452.20
Therefore, the amount of interest on the loan using the exact interest method is approximately $452.20.