Math Help For College

Question

bill borrowed $2,000 at 6% annual simple interest from june 5 to September 5. what is the bank discount using ordinary interst.

 

Answer 1

Thank you for your question!

Since the question is asking us to compute the bank discount using ordinary interest we want to apply the ordinary interest rate formula: (Principal * Rate * Time) / 360.

For this question the Principal is the amount borrowed ($2000), the Rate is the 6% or 0.06, and the Time is 92 since there are 92 days between June 5 and September 5.

So putting that all together the calculation here would be

($2000 * 0.06 * 92) / 360 = $30.67.