Catherine borrowed $19,000 on June 20, at 10% interest. If the loan was due on September 17, what was the amount of interest on the loan using the exact interest method? (Round to the nearest cent)
A) $500.01
B) $273.06
C) $463.00
D) $463.29

Question

Quizplus · Accepted Answer

The exact interest method calculates interest using the actual number of days in a year, which is 365. The loan duration from June 20 to September 17 is 89 days (10 days in June, 31 days in July, 31 days in August, and 17 days in September). The interest calculation formula is: Interest = Principal × Rate × Time, where Time = number of days/365. Therefore, the interest is: $19,000 × 10% × (89/365) = $463.29, rounded to the nearest cent.

Catherine Borrowed $19,000 on June 20, at 10% Interest