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? (round to the nearest hundredth) (Points : 2)

I = PRT

I = 40,000 * 0.13 * 0.4384

I =

$2,279.45

To find the amount of interest on the loan, we need to use the formula for simple interest:

Interest = Principal * Rate * Time

Where:
Principal = the amount borrowed ($40,000 in this case)
Rate = the interest rate per time period (13% in this case)
Time = the number of time periods (160 days in this case)

First, we need to convert the interest rate into a decimal by dividing it by 100:
Rate = 13% / 100 = 0.13

Next, since the time given is in days, we need to convert it to years by dividing it by 365 (assuming a year has 365 days):
Time = 160 days / 365 days per year ≈ 0.438 years

Now we can plug in these values into the formula for simple interest:

Interest = Principal * Rate * Time
Interest = $40,000 * 0.13 * 0.438

Calculating this, we get:
Interest ≈ $2,864.40

Therefore, the amount of interest on the loan is approximately $2,864.40.