Question

A friend asks to borrow $250 for 100 days and agrees to pay 36.5% annual simple interest. How much interest will you earn? Assume that one year has 365 days

Answer 1

$25

Explanation:

We express the interest rate r in decimal form, so we have r=36.5%=36.5100=0.365. We express the time t in years, so we have t=100365. The principal is P=250, so the interest is I=Prt=(250)(0.365)(100365)=$25. The interest earned is $25.