Asked by Susan

Janet Home went to Citizens Bank. She borrowed $7,000 at a rate of 8 percent. The date of the loan was Sept 20. Janet hoped to repay the loan on Jan.20. Assuming the loan is based on ordinary interest, Janet will pay back interest on Jan.20 is?
Answered by Ms. Sue
I = PRT

I = 7,000 * 0.08 * 0.333

Answered by Anonymous

A. $188.22
B. $187.18
C. $187.17

D. $189.78


Ms.sue so which one is the answer I don't get it
Answered by Teja Brown
The formula for this is I = PRT
I = Interest
P = Principal (starting amount) = $7,000
R = Rate (percentage) = 8% = .08
T = Time in years = days/years = 122/365

I = 7000(.08)(122/365)
I = $187.178
I = $187.18 (rounded)

B. $187.18

Ps: When the time is less than a year you have to convert it like I did above.
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