Question

Judy Clark went to Reel Bank. She borrowed $7,800 at a rate of 6 1/2%. The date of the loan was September 2. Judy hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Judy will pay back on January 20: ____________

Answer 1

Judy Clark will pay back $7,993.03 on January 20 for her loan of $7,800 at a 6.5% interest rate, with the interest being calculated for 140 days.

Step-by-step explanation:

To calculate the amount Judy Clark will repay for a loan of $7,800 borrowed from Reel Bank at an ordinary interest rate of 6.5%, we need to determine the amount of interest accumulated by the loan from September 2 to January 20. This involves calculating the time period for the loan, applying the ordinary interest formula, and then adding the interest to the principal amount to find the total repayment amount.

We first calculate the number of days between September 2 and January 20. Without knowing the year of the loan, we can use an approximate count and consider a non-leap year for this example, which would be 140 days (30 days for September after the 2nd, 31 for October, 30 for November, 31 for December, and 18 for January).

Using the formula I = PRT, where P is the principal ($7,800), R is the annual interest rate (0.065), and T is the time in years (140/365), we can calculate the interest:

I = 7,800 × 0.065 × (140/365) = $193.03 (rounded to two decimal places).

To find the total repayment amount, we add the interest to the principal: $7,800 + $193.03 = $7,993.03.

Therefore, Judy Clark will pay back $7,993.03 on January 20.