tony towing borrows of $12,250 at 9.5% interest for 320 days if bank use exact interest method how much interest will the bank collect? Round to nearest cent
I = PRT
I = 12,250 * 0.095 * 0.8767
I = ?
12,250 * 0.095 * 320/365 = $1,020.27
To calculate the interest using the exact interest method, we can use the formula:
Interest = Principal × Rate × Time
Given:
Principal = $12,250
Rate = 9.5% (which can be written as 0.095 in decimal form)
Time = 320 days
Plugging these values into the formula, we have:
Interest = $12,250 × 0.095 × (320/365)
Now, let's calculate the interest:
Interest = $12,250 × 0.095 × (320/365)
= $12,250 × 0.095 × 0.8767123288
≈ $1,004.68
Rounding this amount to the nearest cent, we get $1,004.68. Therefore, the bank will collect approximately $1,004.68 in interest.