Find the ordinary interest to the nearest cent.
-$18,000 at 9% for 90 days
A)$405.00
B)$400.50
C)$1,620.00
D)$18,405.00

Question

Quizplus · Accepted Answer

Ordinary Interest = (Principal x Rate x Time)/360

Time = 90/360 = 0.25 years

Interest = (18,000 x 0.09 x 0.25)/360 = $405.00 (nearest cent)

Therefore, the answer is choice A. The formula for simple interest is: I = Prt where I is the interest earned, P is the principal, r is the interest rate, and t is the time in years.

Since the time given is 90 days (which is not a year), we need to convert that to a fraction of a year. There are 365 days in a year, so:

90/365 = 0.24658 (rounded to 5 decimal places)

Now we can plug in the values we have:

I = (18000)(0.09)(0.24658)
I = $405.04

Rounding to the nearest cent gives us answer choice A, $405.00.

Find the Ordinary Interest to the Nearest Cent