Final answer:
The statement is True. The banker's rule treats a year as having 360 days, simplifying interest computations. This simplification is commonly used in financial calculations.
Step-by-step explanation:
The statement is True. The banker's rule treats a year as having 360 days, simplifying interest computations. This simplification is commonly used in financial calculations.
The banker's rule simplifies interest computations by treating a year as having 360 days. This simplification is often used in financial calculations to make interest calculations easier. Instead of using the actual number of days in a year, which can vary from 365 to 366, the banker's rule assumes a constant 360 days for every year.
For example, if you have an annual interest rate of 5% and you deposit $100 into a bank account, the interest earned in one year would be calculated using the formula: 100 * 0.05 * (360/360) = $5.