On May 23, Samantha Best borrowed $40,000 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 = 40,000 * 0.13 * 0.4384
I = ?
2279.68
Right.
thanks
You're welcome.
To find the amount of interest on the loan, we need to calculate the interest using the exact interest method. The exact interest method is a formula used to calculate interest based on the principal amount, interest rate, and time period.
Here's how you can calculate the amount of interest on the loan:
Step 1: Convert the interest rate into a decimal. To convert 13% into a decimal, divide it by 100: 13/100 = 0.13.
Step 2: Calculate the interest using the formula: Interest = Principal x Rate x Time.
Principal amount: $40,000
Interest rate: 0.13 (converted from 13%)
Time period: 160 days/365 (assuming a 365-day year)
Let's plug the values into the formula and calculate the interest:
Interest = $40,000 x 0.13 x (160/365)
= $40,000 x 0.13 x 0.4384
≈ $2,277.76
Therefore, the amount of interest on the loan is approximately $2,277.76.