Compute the difference between the ordinary interest and the exact interest for a loan with a principle amount of $1100 at 12 percent for 120 days.
I'm getting $0.60
Can you check my work?
No.
To compute the difference between ordinary interest and exact interest, we first need to calculate the ordinary interest and the exact interest separately.
To calculate the ordinary interest, we use the formula: Ordinary Interest = Principal Amount * Interest Rate * Time.
In this case, the principal amount is $1100, the interest rate is 12% (which is equivalent to 0.12 in decimal form), and the time is 120 days (convert to years by dividing by 365: 120/365 ≈ 0.3288).
Ordinary Interest = $1100 * 0.12 * 0.3288 = $43.91 (approximate)
The exact interest differs from the ordinary interest as it takes into account the exact number of days in a year, which is 365. To calculate exact interest, we use the formula: Exact Interest = Principal Amount * Interest Rate * Time.
Exact Interest = $1100 * 0.12 * (120/365) = $42.11 (approximate)
Now, to find the difference between ordinary interest and exact interest, we subtract the exact interest from the ordinary interest:
Difference = Ordinary Interest - Exact Interest
Difference = $43.91 - $42.11 = $1.80
Therefore, the difference between the ordinary interest and the exact interest for a loan with a principal amount of $1100 at 12% for 120 days is approximately $1.80, not $0.60 as you had mentioned earlier.