Janet Home went to Citizen Bank. she borrowed $7000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?
7000 * 0.08* 122/360
189.7777
189.78
To calculate the interest that Janet will pay back on January 20, we need to determine the length of the loan in months.
Step 1: Find the number of months between September 20 and January 20.
September, October, November, December, January - there are 5 months.
Step 2: Calculate the interest using the following formula:
Interest = Principal * Rate * Time
In this case, the principal (loan amount) is $7000 and the interest rate is 8%. The time (in years) is 5 months divided by 12 months (since the rate is per year).
Interest = $7000 * 0.08 * (5/12)
Step 3: Calculate the interest amount:
Interest = $7000 * 0.08 * (5/12)
= $2800 * (5/12)
= $700 * 5
= $3500
Therefore, Janet will pay back $3500 in interest on January 20.
To calculate the amount of interest Janet will pay back on January 20, we'll need to use the formula for ordinary interest:
Interest = Principal * Rate * Time
Where:
- Principal is the initial amount borrowed ($7000 in this case)
- Rate is the interest rate (8% as given)
- Time is the time period in years
First, we need to calculate the time period in years. The loan period is from September 20th to January 20th, which is 4 months. Since we're working with years, we'll convert 4 months into years:
4 months ÷ 12 months/year = 0.33 years (rounded to two decimal places)
Now we can plug the values into the formula:
Interest = $7000 * 0.08 * 0.33
Multiply the Principal ($7000) by the interest rate (8%), and then multiply the result by the time period (0.33 years). This will give us the amount of interest that Janet will pay back on January 20.
Calculating the expression: $7000 * 0.08 * 0.33, we get:
Interest = $184.80
Therefore, Janet will pay back $184.80 in interest on January 20th.
I = PRT
I = 7,000 * 0.08 * 0.33333
I = $186.67