Question

Margaux borrowed 63000 on jan. 16 2012 and paid the loan in full on may 13 2012 with 11% interest. Compute the simple interest using two calendar dates

Answer 1

$2234.26

Explanation:

The formula is ...

i = Prt

Filling in the numbers, we have ...

i = $63000·0.11·(118/366) ≈ $2234.26

The year beginning Jan 16, 2012 and ending on the same date in 2013 has 366 days, so we use that for the number of days in the year. Similarly, the day Feb 29, 2012 adds one day to the interest-earning period, so there are a total of 118 days between 1/16/2012 and 5/13/2012.