carol miller went to europe and forgot to pay her $740 mortgage payment on her new hampshire house. for her 59 days overdue on her payment, the bank charged her a penalty of $15 (assume 360 days) what was the rate of interest charged by the bank?
To find the rate of interest charged by the bank, we can use the formula for simple interest:
Simple Interest = Principal * Rate * Time
We are given:
Principal (P) = $740
Time (T) = 59 days (we will need to convert this to years)
Penalty amount = $15
First, let's calculate the time in years. Since there are 360 days in a year (as mentioned in the question), we divide 59 days by 360 days to get:
Time (T) = 59 days / 360 days/year = 0.1639 years (approximately)
Now, let's rearrange the formula to solve for the rate:
Rate = Simple Interest / (Principal * Time)
Since we know that the Simple Interest is $15, we can substitute the values into the formula:
Rate = $15 / ($740 * 0.1639)
Calculating this, we get:
Rate = $15 / $120.686 = 0.1242 or 12.42% (approximately)
Therefore, the rate of interest charged by the bank is approximately 12.42%.