Louie borrowed $1800 from his aunt last December 25,2010.He promised that he will pay his aunt on February 14,2011 at 8% interest.Find the exact simple interest to be paid by Louie.
$20.20
$20.12
$24.12
$36.60
Explanation:
Principal amount is $1,800.
Rate of interest is 8%.
Counting the number of days from December 25 to February 14;
Dec 25-31 6
Jan 1-31 31
Feb 1-14 14
Total 51 days
Converting days into years:
51 days x (1year365days) = 51365years
Using the formula for solving the simple interest;
Interest = Principal x Rate x Time
Interest = $1,800 x 8% x 51365
Interest = $1,800 x 0.08 x 51365
Interest = $20.12
Therefore, the Louie will pay $20.12 interest.