Joanne and Ed Greenwood built a new barn with an attached arena. To finance the loan, they paid $1,322 interest on $47,300 at 5%. What was the time, using exact interest?
compound or simple interest?
exact interest
To find the time using exact interest, we can use the formula:
Interest = Principal x Rate x Time
In this case, the principal is $47,300, the rate is 5% (or 0.05), and the interest is $1,322. We can rearrange the formula to solve for time:
Time = Interest / (Principal x Rate)
Substituting the given values:
Time = $1,322 / ($47,300 x 0.05)
Time = $1,322 / $2,365
Time ≈ 0.558 years
Therefore, the time, using exact interest, is approximately 0.558 years.
To find the time using exact interest, we need to use the formula:
Interest = Principal × Rate × Time
In this case, the principal is $47,300, the rate is 5% (or 0.05 in decimal form), and the interest is $1,322.
Let's plug in the known values and solve for time:
$1,322 = $47,300 × 0.05 × Time
Divide both sides of the equation by ($47,300 × 0.05):
$1,322 / ($47,300 × 0.05) = Time
Time = $1,322 / $2,365
Time ≈ 0.5583 years
Therefore, the time using exact interest is approximately 0.5583 years.