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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)
=50,000*4%*60/365
328.77
c)
=120,000*7%*275/365
6,328.77
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