Sam Sounds received a $320 discount loan to purchase a stereo. The loan was offered at 16% for 90 days. Find the interest in dollars and the proceeds for the following problem.
To find the interest in dollars and the proceeds, we need to calculate the total amount Sam will have to pay back.
First, we calculate the interest:
Interest = Principal * Rate * Time
In this case, the principal is $320, the rate is 16% (or 0.16 as a decimal), and the time is 90 days (or 90/365 as a fraction of a year).
Interest = $320 * 0.16 * (90/365)
Next, we calculate the proceeds:
Proceeds = Principal - Interest
Let's calculate both the interest and proceeds:
Interest = $320 * 0.16 * (90/365)
= $13.15 (rounded to 2 decimal places)
Proceeds = $320 - $13.15
= $306.85 (rounded to 2 decimal places)
Therefore, the interest in dollars is $13.15, and the proceeds are $306.85.