Question

Calculate the simple interest due on a 54-day loan of $4800 if the interest rate is 5%. (Round your answer to the nearest cent.)

Answer 1

In this problem, we must compute the simple interest of a loan of:

• t = Time = 54 days,

,

• P = Principal Ammount = $4800,

,

• r = Interest rate per year = 5% = 0.05 (in decimals).

The simple interest is given by the following formula:

$I=P\cdot r\cdot\frac{t}{365}=4800\cdot0.05\cdot\frac{54}{365}\cong35.51.$

Answer

The simple interest of the loan is $35.51 to the nearest cent.