Question

Sue Shopper received a $749.25 discount loan to purchase a refrigerator. The loan was offered at 12% for 120 days. Find the interest in dollars and the proceeds for the following problem.

The interest is $?
The proceeds are $?

Answer 1

Dived loan and purchase to get interest

Answer 2

The interest is $29.97

The proceeds are $719.28

Explanation:

Data:

L = Loan = $749.25

r = Interest rate = 12% = 0.12

t = Time = 120 days

n = days of the year = 360 days

X = Interest in dollars = ?

Y = Proceeds = ?

X =L * t * (r/n) = $749.25 * 120 * (0.12/360) = $29.97

Y = L - X = $749.25 - $29.97 = $719.28

Therefore,

The interest is $29.97

The proceeds are $719.28

Hope this helps!