Question

Calculate the interest for the following. Assume a 360 -day year. a. $ 20,000,3 %, 3 year(s) b. $ 25,000,12 %, 5 months c. $ 9,500,18 %, 80 days Note a. interest =

Answer 1

Explanation:

a. To calculate the interest for $20,000 at a 3% interest rate over 3 years, we use the formula: Interest = Principal × Rate × Time.

So, the interest would be $20,000 × 0.03 × 3 = $1,800.

b. For $25,000 at a 12% interest rate over 5 months, we need to convert the time to years. 5 months is 5/12 of a year.

Using the same formula, the interest would be $25,000 × 0.12 × (5/12) = $1,250.

c. For $9,500 at an 18% interest rate over 80 days, we also need to convert the time to years. 80 days is 80/360 of a year.

Applying the formula, the interest would be $9,500 × 0.18 × (80/360) = $380.