Please help me.

Jo-Jo1961

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Apr 10, 2013
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On April 17, 2010, Janeen Camoct took out an 7.6% loan for $23,500. The loan is due March 22, 2011. Use ordinary interest to calculate the interest.
What total amount will Janeen pay on March 22, 2011?

So far I have:

365 - - - - - - -23,500 x .076 x 339 divided by 360 for me comes up to 0.940 divided by 23,500= 24,973.43 which is not right. Ordinary interest in 360 days
107- (April 17th)
-------
258
+81 (March 22nd)
------
339

 

HallsofIvy

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Okay, what you have calculated is that there are 339 days from April 17, 2010 to March 22, 2011. That is \(\displaystyle \frac{339}{365}= 0.929\) of a year. At 7.6% simple interest rate, the interest will be (23500)(.076)(.929)= $1658.79.

Yes, (.076)(.929)= 0.0706 not ".940". And it is certainly NOT that divided by 23500.
 

ameerhamza

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Apr 16, 2013
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you calculated 339 days between april 17 and march 22. that means 339/365 which gives 0.92 in year ...
to calculate interest
23500*0.076*0.92=1643
 

soroban

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Jan 28, 2005
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5,587
Hello, Jo-Jo1961

Evidently, no one understands ordinary interest.


On April 17, 2010, Janeen took out a 7.6% loan for $23,500.
The loan is due March 22, 2011.
Use ordinary interest to calculate the interest.
What total amount will Janeen pay on March 22, 2011?

Formula: .\(\displaystyle I \;=\;P \times R \times T\)

Hence: .\(\displaystyle I \;=\;23,\!500 \times 0.076 \times\dfrac{339}{\color{red}{360}} \;=\;1681.816666 \;\approx\;\$1681.82\)


Therefore, she will pay back: .\(\displaystyle \$23,\!500 + 1,\!681.82 \;=\;\$25,\!181.82\)
 

HallsofIvy

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Yeah, we keep forgetting that there are only 360 days in a year!
 

stapel

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Yeah, we keep forgetting that there are only 360 days in a year!
For certain banking "rules", yes, there are (assumed to be) only 360 days in a year. I'm sure this simplified things considerably, back when computations were done by hand, but it can makes things surprisingly complicated in this day of spreadsheets. ;)
 

Jo-Jo1961

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Apr 10, 2013
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Thank you to everyone....Special thanks to you soroban, I appreciate it. Have a great day :)
 

srmichael

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Oct 25, 2011
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Thank you to everyone....Special thanks to you soroban, I appreciate it. Have a great day :)
Chicks dig the picture-ready solutions. ;)
 
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