A firm arranged for a 120-day bank loan at an annual rate of interest of 10 percent. If the loan is for$100,000, how much interest in dollars will the firm pay? (Assume a 360-day year.)

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Quizplus · Accepted Answer

The interest for the loan can be calculated using the formula: Interest = Principal x Rate x Time. Here, the principal is $100,000, the annual rate is 10% (or 0.10), and the time is 120/360 of a year. So, Interest = $100,000 x 0.10 x (120/360) = $3,333.33.

A Firm Arranged for a 120-Day Bank Loan at an Annual