carol miller went to europe and forgot to pay her 4740 mortgage payment on her new hampshire house,. for her 59 days overdue on her paymen. the bank charged her a penalty of $15 assume 360 days. what was the rate of interest charged by the bank?
To calculate the rate of interest charged by the bank, we need to use the formula for simple interest:
Simple Interest = (Principal × Rate × Time) / 100
Where:
Principal = $4740 (the mortgage payment amount)
Rate = ?
Time = 59 days (the number of days overdue on the payment)
First, let's convert the number of days into a fraction of a year. Since there are 360 days in a year (as stated in the question), we can divide 59 by 360:
Time (in years) = 59 / 360
Now, we can substitute the values into the formula:
Simple Interest = (Principal × Rate × Time) / 100
$15 = ($4740 × Rate × (59/360)) / 100
We can simplify this equation by multiplying both sides by 100 and dividing both sides by $4740:
1500 = Rate × (59/360)
To isolate the Rate, we can multiply both sides by 360 and divide by 59:
Rate = (1500 × 360) / 59
Now, let's calculate the rate of interest charged by the bank:
Rate = (1500 × 360) / 59
Rate ≈ 9189.83
Therefore, the approximate rate of interest charged by the bank is 9189.83%.