Question

Sam Sounds received a $290 discount loan to purchase a stereo. The loan was offered at 16% for 90 days. Find the interest in dollars and the proceeds for the following problem. The interest is $ . The proceeds are $

Answer 1

The other answer is almost right. Instead of dividing 90 by 365, you divide it by 360.
90/360=.25
16% of 290= 46.4
46.4 ×.25= 11.6 = interest
290-11.6= 278.4= proceeds

Answer 2

In order to solve this task you have to use a the interest formula.
So, the formula is I = Adt.
Keep in mind the value P = $290 which is the Amount of the loan,
d is the discount rate = 16% = 0.16
t is period of time= 90days - simplify 90/365. So the period is 18/73.
Then calculate principle amount of money using this : (1 + rt).

Solution:
`I = 290 x 0.16 x 18/73 = 11.44 Interest = $11.44`

Proceed = Amount - Interest:


`= 290 - 11.44 = $278.56`

The answer is $278.56