Question

our bank granted you a single-payment loan of $31,000 for 45 days at an interest rate of 20%. Your bank charges ordinary interest. How much do you pay in interest?

Answer 1

Solution given:

R=rate=20%

T=time=45days =1month and 15 days =1 ½ months=⅛years

P=Principal=$31000

since bank gives/takes compound interest

so

interest=P((1+R/100)^T-1)

=31000((1+20/100)^⅛-1)=$714.6

I need to pay $ 714.6