Joanne and Ed Greenwood built a new barn with an attached arena. To finance the loan, they paid $1,307 interest on $45,000 at 4.0%. What was the time, using exact interest?
To find the time using exact interest, we can use the formula:
Interest = Principal * Rate * Time
Given that the interest is $1,307, the principal is $45,000, and the rate is 4.0%, we can substitute these values into the formula and solve for time.
1,307 = 45,000 * 0.04 * Time
Dividing both sides of the equation by (45,000 * 0.04):
Time = 1,307 / (45,000 * 0.04)
Time = 1,307 / 1,800
Time = 0.7264
Therefore, the time, using exact interest, is approximately 0.7264 years or approximately 8.717 months.
To find the time, we can use the formula for simple interest:
I = P * r * t
Where:
I is the interest,
P is the principal amount,
r is the interest rate per period, and
t is the time in periods.
In this case, we are given the interest I as $1,307, the principal amount P as $45,000, and the interest rate r as 4.0% (or 0.04 in decimal form).
Plugging these values into the formula, we have:
1,307 = 45,000 * 0.04 * t
To find the time t, we can rearrange the equation:
t = (1,307) / (45,000 * 0.04)
Now we can solve for t:
t = 1,307 / (1,800)
By dividing these numbers, we find:
t ≈ 0.726
Therefore, the time using exact interest is approximately 0.726 periods.
I = Po*(r/365)*t = $1307
I = 45000*(.04/365)*t = 1307
4.932t = 1307
t = 265 Days.