Asked by Megan Byers on Jun 24, 2024
Verified
Shane Morita opened a pet store near a school, hoping that children would see the pets in the window as they walked home. Almost immediately he needed to borrow money to maintain the pets. He got a 90-day loan for $5,600 at 9.3% exact simple interest. Compute the amount of Shane's total obligation in 90 days. (Use a 365-day year.)
Exact Simple Interest
Exact simple interest is a calculation method where interest accrues on a principal sum at a constant rate over a specific time period, using a 365-day year for calculations.
365-Day Year
A method used in finance that assumes a year consisting of 365 days for calculating interest, ignoring leap years.
- Achieve proficiency in computing accurate simple interest on loans utilizing a 365-day year framework.
- Ascertain the complete repayment figure (principal alongside interest) for short-period lending.
Verified Answer
SB
Spriha BurmanJun 27, 2024
Final Answer :
$5,600 × 0.093 × 90/365 = $128.42; $5,600 + $128.42 = $5,728.42
Learning Objectives
- Achieve proficiency in computing accurate simple interest on loans utilizing a 365-day year framework.
- Ascertain the complete repayment figure (principal alongside interest) for short-period lending.