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21 December, 16:38

Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?

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  1. 21 December, 18:39
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    The interest is $189.78

    Explanation:

    The computation of the interest on January 20 is shown below:

    = Principal * interest rate * number of days : total number of days in a year

    = $7,000 * 8% * 122 days : 360 days

    = $7,000 * 8% * 0.338

    = $189.78

    The 122 days are calculated below:

    September - 10 days

    October - 31 days

    November - 30 days

    December - 31 days

    January - 20 days

    Total - 122 days

    And we assume the 360 days in a year
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