Question

Assume you have a $18,500 loan at 10.5% interest for 90 days.

What is the Ordinary interest you would pay?
a. $456.56
b. $486.04
c. $512.63
d. $542.11

Answer 1

The ordinary interest on a $18,500 loan at 10.5% interest for 90 days is $486.04.

Step-by-step explanation:

To calculate the ordinary interest, we can use the formula:

Interest = Principal × Rate × Time

Given that the principal is $18,500, the rate is 10.5%, and the time is 90 days (or 0.25 years), we can substitute these values into the formula:

Interest = $18,500 × 0.105 × 0.25 = $486.04

Therefore, the ordinary interest you would pay on a $18,500 loan at 10.5% interest for 90 days is $486.04, which corresponds to option b.