Hernandez Engineering borrows $6,500, at 
6 1/2% interest, for 120 days. If the bank uses the ordinary interest method, how much interest (in $) will the bank collect? (Round your answer to the nearest cent.)

The formula to calculate simple interest is:

\[
I = P \times r \times t
\]

Where:
- $ I $ = Interest
- $ P $ = Principal amount (the loan) = $6,500
- $ r $ = Interest rate (as a decimal) = 6.5% = 0.065
- $ t $ = Time in years

### Step 1: Convert time to years
Since we are using the ordinary interest method, which assumes a 360-day year, the time in years is calculated as:

\[
t = \frac{120}{360} = 0.3333
\]

### Step 2: Calculate the interest

Now plug the values into the simple interest formula:

\[
I = 6500 \times 0.065 \times 0.3333 = 141.66
\]

So, the bank will collect **$141.66** in interest.

Would you like further clarification on this solution?

Here are 5 related questions:
1. How does the ordinary interest method differ from the exact interest method?
2. What would the interest be if the loan term was 150 days?
3. How would the interest change if the interest rate was increased to 7%?
4. How much total repayment would Hernandez Engineering owe after 120 days?
5. What is the formula for compound interest, and how does it differ from simple interest?

**Tip:** Always remember to check the type of interest method (ordinary or exact) to ensure accurate time conversion!

Hernandez Engineering borrows $6,500, at 6 1/2% interest, for 120 days. If the bank uses the ordinary interest method, how much interest (in $) will the bank collect? (Round your answer to the nearest cent.)

Learn how to calculate simple interest on a $6,500 loan at a 6.5% interest rate over 120 days using the ordinary interest method. This guide provides step-by-step instructions on using the simple interest formula and time conversion for a 360-day year. Suitable for students in Grades 9-12.

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