Quantitative methods

State Bank made a loan at 12% interest for 360 days. If the amount of interest was $934.20, use the ordinary interest method to find the amount of principal borrowed.

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  1. If 360 days counts as a year, then you want P such that

    0.12*P = 934.20

    If a year is counted as 365 days, then

    0.12*(360/365)*P = 934.20

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  2. Note:
    Ordinary interest method is based 360 days in a year.
    Exact interest method is based on 365 days in a year.

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