Question

Kristi Yang borrowed $12,000. The term of the loan was 150 days, and the annual simple interest rate was 6.5%. Find the simple interest due on the loan. (Round your answer to the nearest cent.)

Answer 1

For an initial ammount borrowed I, an term of the loan t, and an annual interest rate r, the simple interest S due on the loan is given by:

$S=I\cdot r\cdot\frac{t}{365}$

For I = $12000, r = 0.065 and t = 150 days, we have:

$\begin{gathered} S=12000\cdot0.065\cdot\frac{150}{365} \\ S=12000\cdot0.065\cdot0.41096 \\ S=\text{ \ 320.55} \end{gathered}$