Asked by Holly Phillip on May 11, 2024
Verified
Nathan Edwards borrowed $2,500 for 60 days to buy new clothes after an apartment fire. From his insurance proceeds, Nathan repaid a total of $2,531.25, principal and interest. Compute the ordinary simple interest rate (360-day year) that was charged. (To nearest 1/10 of a percent.)
Ordinary Simple Interest Rate
The standard interest rate applied to a loan or investment, calculated on the principal amount without compounding over a specific period.
360-Day Year
A financial calculation assumption where the year is considered to have 360 days for simplifying interest calculations.
- Master the computation and comprehension of simple interest on loans according to a 360-day year.
- Compute the chief sum or rate upon being offered other loan parameters.
Verified Answer
NS
Nhidayah SafarinMay 15, 2024
Final Answer :
I = $2,531.25 - $2,500 = $31.25; R = I ÷ (PT) = $31.25 ÷ ($2,500 × 60/360) = 0.075 = 7.5%
Learning Objectives
- Master the computation and comprehension of simple interest on loans according to a 360-day year.
- Compute the chief sum or rate upon being offered other loan parameters.