A print shop borrows

Question

$8400
from a credit union for
307
days. The credit union charges simple interest at an annual rate of
5.75% for this loan. Assume each day is 1/365 of a year. Answer each part below.

Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the
list of financial formulas
.

(a) Find the interest that will be owed after
307
days.
$


(b) Assuming the print shop doesn't make any payments, find the amount owed after
307
days.

Answer 1

(a) To find the interest that will be owed after 307 days, we can use the formula for simple interest:

Interest = Principal x Rate x Time

Here, the principal is $8400, the rate is 5.75% (or 0.0575 as a decimal), and the time is 307 days (or 307/365 as a fraction of a year).

Interest = $8400 x 0.0575 x (307/365) = $583.63

The interest owed after 307 days is $583.63.

(b) To find the amount owed after 307 days, we add the interest to the principal:

Amount Owed = Principal + Interest

Amount Owed = $8400 + $583.63 = $8983.63

The amount owed after 307 days is $8983.63.