Solve the problem. Round dollar amounts to the nearest cent. Use ordinary interest unless otherwise indicated.
-Continental Tools bought a new computer system. To pay for the system, they borrowed $28,120 from the bank at % interest for 125 days. Find the interest.
A)$956.86
B)$943.75
C)$2,755.76
D)$949.21

Question

Solve the problem. Round dollar amounts to the nearest cent. Use ordinary interest unless otherwise indicated.
-Continental Tools bought a new computer system. To pay for the system, they borrowed $28,120 from the bank at  % interest for 125 days. Find the interest.
A)$956.86 
B)$943.75 
C)$2,755.76 
D)$949.21

Quizplus · Accepted Answer

First, convert the interest rate to a decimal by dividing by 100: 11/100 = 0.11
Next, use the simple interest formula: 
I = Prt 
where I is the interest, P is the principal (amount borrowed), r is the interest rate per year (as a decimal), and t is the time in years (or fractions of a year).
To find t, divide 125 days by 365 (the number of days in a year): 
t = 125/365 = 0.3425
Now, plug in the values: 
I = ($28,120)(0.11)(0.3425) = $956.86
Rounding to the nearest cent, the answer is A) $956.86.

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