Question

Mel took out a loan of $40,000 at 14 percent on March 16, 2015 which will be due on January 9, 2016. Using exact interest the amount of Mel's interest cost is:

Answer 1

the interest cost is $4,679.45

Explanation:

The computation of the interest cost is shown below:

= Loan amount × rate of interest × given no of days ÷ total no of days in a year

= $40,000 × 14% × 305 days ÷ 365 days

= $4,679.45

hence, the interest cost is $4,679.45