Answer:
A. $285.00
Step-by-step explanation:
You need to look at your reference materials to see how to compute interest for short-term simple-interest accounts. There are two ways to do it:
- ordinary interest -- assumes 360 days per year
- exact interest -- assumes 365 days per year.
Quite often, a bank will use ordinary interest for their computation.
The interest formula is ...
I = Prt
where P is the principal amount of the loan, r is the annual interest rate, and t is the number of years (a fraction of a year in this problem). Filling in the numbers, you get ...
I = $4000×0.095×(270/360) = $285 . . . . matches choice A
