Question

A print shop borrows $5100 from a credit union for 356 days. The credit union charges simple interest at an annual rate of 6.5% for this loan. Assume each dayof a year. Answer each part below,365isDo not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.X5?(a) Find the interest that will be owed after 356 days,si(6) Assuming the print shop doesn't make any payments, find the amount owed after 356 days,Submit Assignment2021 McLC Algementer of Use y Carter AB545 PMO 92°FA 10 10/3/200139OEFType here to search

Answer 1

(a) To determine the insterest, use the following formula for simple interest:

I = P*r*t

where,

P: principal investment

r: rate

t: time

If the credit union charges simple interest, then each day has a daily rate of:

r = 6.5%/365 = 0.0178% = 0.0178/100 = 0.000178

Then, for 356 days, the interest owed is:

I = ($5100)(0.000178)(356)

I = $323.18

Hence, the interest owed after 356 days is $323.18

(b) If the print shop does not make any payment, the amount owed is:

$5,100 + $323.18 = $5423.18