Question

Find the bank discount and proceeds using ordinary interest for a loan to michelle anders for 7,200 at 8.25% annual simple interest from august 8 to november 8

Answer 1

$145.5

Explanation:

Period, t = August 8.to November 8 = 3 months

Simple interest formula :

A = P(1 + rt)

A = final amount =. 7200

7200 = P(1 + (0.0825 * 3/12))

7200 = P(1 + 0.020625)

7200 = P(1.020625)

7200 = 1.020625P

P = 7200 / 1.020625

P = 7054.5009

Bank discount :

A - P

7200 - 7054.5009

= $145.4991

= $145.5