Billy Thornton borrowed $20,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month.The bank uses a 360-day year.How much interest would Billy have to pay in a 30-day month?
A) $120.83
B) $126.88
C) $133.22
D) $139.88
E) $146.87

Question

Quizplus · Accepted Answer

The interest for a 30-day month is calculated as follows:Interest = Principal x Rate x TimeInterest = $20,000 x 7.25% x (30/360)Interest = $20,000 x 0.0725 x (1/12)Interest = $120.83

Billy Thornton Borrowed $20,000 at a Rate of 7