College finance

Question

Solve the problem. Assume that simple interest is being calculated in each case. Round the answer to the nearest cent unless otherwise indicated.

Annie’s cafe borrows $8300 at 6% for 70 days. Find the total amount that must be repaid after 70 days (use a 365 day year)

Answer 1

Dear Scott:

                      The key here is  Simple Interest so..

 

  I=  P  *  R  *  T

 

 

  Where :

 

 I= Interest

 

 R= 6%   (0.06)

 

T= (70/365)  =0.192   (Rounded)

 

   I=   ($8300.00   *0.06  *  0.192)

 

    I=  $95.62     

 

 Total =   ($8300.00    +  $95.62 )

    

   Giving  $8,395.62  Total owed.