Question

Compute the exact interest on $5,870 at 12% if the money is borrowed from June to December of the same year.

Answer 1

The exact interest on $5,870 at 12% is $410.9

Explanation:

From the information provided we know that

Principal amount: $5,870

Interest rate: 12% -> 0.12

Time: 7 months (From June to December)

When you know the principal amount, the rate, and the time, the amount of interest can be calculated by using the formula:

`I=P\cdot r\cdot t`

where P is principal, r is the rate of interest and t is the time in years.

We need to convert the 7 months into 1 year.

`7 \>months \cdot (1 year)/(12 months) = (7)/(12) year`

Now we can use the above formula

`I=P\cdot r\cdot t=5870\cdot 0.12 \cdot (7)/(12) \\I = 0.12\cdot (7\cdot \:5870)/(12)\\I = 0.12\cdot (20545)/(6)\\I = (2465.4)/(6)\\I = 410.9`

Therefore the exact interest on $5,870 at 12% is $410.9