Asked by Jimmy Trinh on Jun 22, 2024
Verified
Willie White borrowed $2,485 for 105 days at 8% exact simple interest (365-day year). Compute the total amount that Willie must repay at the end of the loan period.
Exact Simple Interest
A method of calculating interest that uses a base of 365 days per year, ensuring accuracy based on actual calendar days.
365-Day Year
A 365-day year is a calendar method used in finance that assumes all years have 365 days for the calculation of interest rates.
- Master the calculation of exact simple interest for loans, assuming a 365-day year.
- Determine the total amount to be repaid (initial amount borrowed plus interest) for short-term borrowing.
Verified Answer
TR
Tyler ReevesJun 23, 2024
Final Answer :
I = PRT = $2,485 × 0.08 × 105/365 = $57.19; $2,485 + $57.19 = $2,542.19
Learning Objectives
- Master the calculation of exact simple interest for loans, assuming a 365-day year.
- Determine the total amount to be repaid (initial amount borrowed plus interest) for short-term borrowing.