Sam Sounds received a $290 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.
The interest = 11.60
Proceeds= 278.40
To find the interest and proceeds, we need to calculate the interest amount and subtract it from the loan amount.
Step 1: Calculate the interest amount:
Interest = Loan Amount * Interest Rate * Time
Interest = $290 * 0.16 * (90/365)
Interest = $11.23 (rounded to the nearest cent)
Step 2: Calculate the proceeds:
Proceeds = Loan Amount - Interest
Proceeds = $290 - $11.23
Proceeds = $278.77 (rounded to the nearest cent)
Therefore, the interest amount is $11.23 and the proceeds are $278.77.
To find the interest in dollars and the proceeds for Sam's loan, we first need to calculate the interest.
Step 1: Convert the interest rate to a decimal
The interest rate of 16% is equivalent to 0.16 as a decimal.
Step 2: Calculate the interest
The formula to calculate simple interest is:
Interest = Principal * Rate * Time
In this case, the principal is the amount of the loan, which is $290. The rate is 0.16 (as calculated in step 1), and the time is 90 days.
Interest = $290 * 0.16 * (90/365)
Step 3: Calculate the proceeds
The proceeds are the initial loan amount minus the interest paid.
Proceeds = Principal - Interest
Proceeds = $290 - (Interest calculated in step 2)
Now let's calculate the interest and proceeds:
Interest = $290 * 0.16 * (90/365) = $11.78 (rounded to two decimal places)
Proceeds = $290 - $11.78 = $278.22 (rounded to two decimal places)
Therefore, the interest in dollars is $11.78, and the proceeds are $278.22.