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gulaghasi [49]
3 years ago
5

Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repa

y the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?
Business
1 answer:
coldgirl [10]3 years ago
8 0

Answer:

The interest is $189.78

Explanation:

The computation of the interest on January 20 is shown below:

= Principal × interest rate × number of days ÷ total number of days in a year

= $7,000 × 8% × 122 days ÷ 360 days

= $7,000 × 8% × 0.338

= $189.78

The 122 days are calculated below:

September - 10 days

October - 31 days

November - 30 days

December - 31 days

January  - 20 days

Total    - 122 days

And we assume the 360 days in a year

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