please help with answer

Question

A student takes out an emergency loan for tuition, books, and supplies. The loan is for $200 with an interest rate of 3%. How much interest does the student pay if the loan is paid back in 60 days?

Answer 1

Interest rate on a loan is typical charged annually.

So if the interest on this $200 loan is 3% (0.03), then the interest AFTER one year would be $200 x (0.03) = $6

But the loan is paid back early, after 60 days, so the interest is prorated by the ratio (60/365)

The interest would be $200 x (0.03) x (60 / 365) = $0.99 Final Answer

Hope this helps...