Find the ordinary interest on a loan of $850 at 11% annually made on February 10 and due May 31.
A) $28.57
B) $878.57
C) $93.50
D) $28.31

Question

Quizplus · Accepted Answer

Ordinary interest uses a 360-day year to calculate interest. The time period from February 10 to May 31 is 110 days (20 days in February, 31 days in March, 30 days in April, and 29 days in May). The interest is calculated as $Interest = Principal \times Rate \times \frac{Time}{360}$. Thus, $Interest = 850 \times 0.11 \times \frac{110}{360} = 28.569$, which rounds to $28.57.

Find the Ordinary Interest on a Loan of $850 at 11