Answer :
Answer: the ordinary interest is $6.5625
Step-by-step explanation:
In calculating ordinary interest, the number of days in a month is considered to be 360 days. We would apply the formula for determining simple interest which is expressed as
I = PRT/100
Where
I represents interest paid on the loan.
P represents the principal or amount taken as loan
R represents interest rate
T represents the duration of the loan in years.
From the information given,
P = $420
R = 6.25%
T = 90 days = 90/360 = 0.25 day
I = (420 × 6.25 × 0.25)/100
= $6.5625
Answer:
The ordinary interest is $6.5625
Step-by-step explanation:
1. Jane Dimas obtained a single payment loan of $420.
=> Principal is $420
2. She agreed to repay the loan in 90 days
Time is 90 days
3. at an interest rate of 6.25% ordinary interest.
Rate is 6.25% = 6.25/100
The ordinary interest is given as
Principal × Rate × Time/360
= 420 × 6.25/100 × 90/360
= 6.5625