Question

50 points

Jessica obtains a loan for home renovations from a bank that charges simple interest at an annual rate of 9.65%. Her loan is for $17,100 for 54 days. Assume each day is 1/365 of a year. Answer each part below.

Do not round any intermediate computations, and round your final answers to the nearest cent.

(a) Find the interest that will be owed after 54 days: $
(b) Assuming Jessica doesn't make any payments, find the amount owed after 54 days: $

Answer 1

$17,184.80.

Explanation:

Jessica's loan for home renovations is for $17,100 for 54 days. The bank charges simple interest at an annual rate of 9.65%. To calculate the interest charged, first, we need to find the daily interest rate, which is 9.65% divided by 365, resulting in 0.0264%. The total interest charged on the loan is $84.80, which is calculated by multiplying the daily interest rate by the loan amount and the number of days (0.000264 x $17,100 x 54). Therefore, Jessica's total amount owed to the bank at the end of the loan term is $17,184.80.