Mike is supposed to pay $750 to Sarah, but wishes to delay it for 48 days. Determine the amount Sarah should expect in 48 days if the rate of interest is 6.55%
A) $756.46
B) $765.66
C) $771.55
D) $793.12
E) $795.61

Question

Quizplus · Accepted Answer

The interest can be calculated using the simple interest formula: Interest = Principal × Rate × Time. Here, Principal = $750, Rate = 6.55% per annum (or 0.0655 when expressed as a decimal), and Time = 48/365 years (since the rate is per annum and there are 365 days in a year). Interest = $750 × 0.0655 × (48/365) = $6.46 approximately. Therefore, the total amount Sarah should expect = Principal + Interest = $750 + $6.46 = $756.46.

Mike Is Supposed to Pay $750 to Sarah, but Wishes