Compute the amount of interest on $785. 95 borrowed at 8% p.a. from January 30, 2022, until March 21, 2022.


Question 8Answer

a. 

$8.61

b. 

$9.61

c. 

$8.66

d. 

$8.16

To compute the amount of interest on \$785.95 borrowed at 8% per annum from January 30, 2022, until March 21, 2022, we'll follow the steps below:

1. **Determine the Time Period:**
   - January 30, 2022, to March 21, 2022.
   - January has 1 day remaining (January 30 to January 31).
   - February has 28 days (2022 is not a leap year).
   - March has 21 days.

   Total number of days = $1 + 28 + 21 = 50$ days.

2. **Convert Days to Years:**
   \[
   T = \frac{50}{365} \text{ years}
   \]

3. **Calculate the Simple Interest:**
   Using the formula:
   \[
   \text{Simple Interest} = \frac{P \times R \times T}{100}
   \]
   Where:
   - $ P = 785.95 $
   - $ R = 8 \%$
   - $ T = \frac{50}{365} \text{ years}$

   Plugging in the values:
   \[
   \text{Simple Interest} = \frac{785.95 \times 8 \times \frac{50}{365}}{100}
   \]

4. **Perform the Calculation:**
   \[
   \text{Simple Interest} = \frac{785.95 \times 8 \times 0.13699}{100} = \frac{860.93}{100} = 8.61
   \]

So, the interest is **\$8.61**.

The correct answer is:

**a. \$8.61**

Would you like more details or have any questions? Here are 5 related questions to explore:

1. How would the interest change if the loan period was extended to 75 days?
2. What would the interest be if the amount borrowed was \$1,000 instead?
3. How does changing the interest rate to 10% affect the calculation?
4. How would compound interest affect the interest amount in this scenario?
5. What is the importance of accurately determining the number of days in interest calculations?

**Tip:** Always ensure the exact number of days between dates is counted accurately when calculating interest for non-full-year periods.

Learn how to compute simple interest on $785.95 borrowed at 8% per annum from January 30, 2022, to March 21, 2022. Follow a step-by-step calculation using the Simple Interest formula. Answer to the problem is $8.61.

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