Question

Central Auto Parts borrowed $450,000 at 9% interest on July 9 for 140 days.

(a)
If the bank uses the ordinary interest method, what is the amount (in $) of interest on the loan?

Answer 1

The amount of interest on the loan is $15,412.33.

Step-by-step explanation:

To calculate the amount of interest on the loan using the ordinary interest method, you can use the formula:

Interest = Principal x Rate x Time

Given that the principal is $450,000, the interest rate is 9%, and the time is 140 days, we can substitute these values into the formula:

Interest = $450,000 x 0.09 x (140/365)

Simplifying, we get:

Interest = $15412.33

Therefore, the amount of interest on the loan is $15,412.33.