abe wolf brought a new kitchen set at sears. abe paid off the loan after 60 days with as interest of $9. if sears charges 8% interest. What dis abe pay for the kitchen set (assume 360 days)
Assuming 360 days per year, 60 days is 2 months out of 12.
At an interest rate of 8%, he had to pay (8*2/12)%=(4/3)% of his loan in interests.
By proportion,
(4/3)% : $8
100% : x
Cross multiply to get:
Loan=
x=8*100%/(4/3)%
=$600
To calculate the total amount Abe paid for the kitchen set, we need to find the principal amount (the original price of the kitchen set).
Let's break down the information we have:
Loan duration: 60 days
Interest charged: $9
Annual interest rate: 8%
Assumption: 360-day year
First, we need to calculate the interest for the entire year using the given 8% annual interest rate. We can use the formula:
Interest = Principal * Rate * Time
Since the interest is calculated for a 360-day year, we convert the 8% annual interest to a daily interest rate:
Daily interest rate = Annual interest rate / Number of days in a year
Daily interest rate = 8% / 360 = 0.08 / 360 = 0.0002222
Now we can calculate the principal amount by dividing the given interest ($9) by the daily interest rate:
Principal = Interest / Daily interest rate
Principal = $9 / 0.0002222 ≈ $40,504.05
Therefore, Abe paid approximately $40,504.05 for the kitchen set.