Find the interest in dollars and the proceeds for the following problem. Choose the correct answers.
Tim Tele received a $380 discount loan to purchase a DVD player. The loan was offered at 18% for 60 days. Find the interest in dollars and the proceeds for the following problem.
I = Ab*r*t = 380*(0.18/360)*60 = $11.40
Ar = Ab-I = 380 - 11.40 = $368.60 = Amt. received or proceeds.
To find the interest in dollars and the proceeds for this problem, we can follow these steps:
Step 1: Convert the percentage rate to decimal form.
Since the loan is offered at 18%, we need to convert it to decimal form by dividing it by 100:
18% รท 100 = 0.18
Step 2: Find the interest amount.
The interest amount can be calculated using the formula:
Interest = Principal * Rate * Time
In this case:
Principal = $380
Rate = 0.18
Time = 60 days
Let's calculate the interest amount:
Interest = $380 * 0.18 * (60/365)
Step 3: Calculate the proceeds.
The proceeds are the loan amount minus the interest amount. In this case:
Proceeds = Principal - Interest
Now, let's calculate the interest in dollars and the proceeds.
Interest = $380 * 0.18 * (60/365)
Interest = $37.05 (rounded to the nearest cent)
Proceeds = $380 - $37.05
Proceeds = $342.95
Therefore, the interest in dollars is $37.05 and the proceeds are $342.95.