Calculate the amount of interest for each of the following independent situations (assume

365 days per year):

a)  $400,000 is borrowed at 6% interest for 1 year.

b)  $50,000 is borrowed at an annual interest rate of 4% for 60 days.

c)  $120,000 is borrowed at an annual interest rate of 7% for 275 days.

Answer:

Amount in $

Interest = Principal amount * Rate of interest*Time

a)

Interest amount

 =400,000*6%*1

                 24,000

b)

Interest amount

 =50,000*4%*60/365

                 328.77

c)

Interest amount

 =120,000*7%*275/365

              6,328.77