On May 23, Samantha Best borrowed $4,000 from the Tri City Credit Union at 13% for 160 days. The credit union uses the exact interest method. What was the amount of interest on the loan?
I = PRT
I = 4,000 * 0.13 * 0.4384
$40,000 x 13% x 160 /365 = $2,279.45 the amount of interest on the loan?
that is the wrong answer
4,000x.13x160/365= 227.95
To calculate the amount of interest on the loan, we can use the formula:
Interest = Principal x Rate x Time
where:
- Principal is the amount borrowed ($4,000)
- Rate is the interest rate (13% or 0.13 as a decimal)
- Time is the time period in years (160 days / 365 days)
Let's break down the calculation step by step:
Step 1: Convert the time period to years
160 days / 365 days ≈ 0.43836 years
Step 2: Calculate the interest
Interest = $4,000 x 0.13 x 0.43836
Now, let's find the value of the interest.
Interest = $4,000 x 0.13 x 0.43836
= $227.04 (rounded to the nearest cent)
Therefore, the amount of interest on the loan is approximately $227.04.