Question

Trevor's bank pays 1.94% simple interest. Of his principal is $241, and he left all of it in his account for 54 days. How much interest will Trevor earn?

Answer 1

9514 1404 393

Answer:

$0.70

Explanation:

The interest is computed using the formula ...

I = Prt

where r is the annual rate, and t is the time in years. Banks compute interest using "ordinary interest", which assumes a 360-day year. Trevor's interest is ...

I = $241(0.0194)(54/360) = $0.70