Pasco Co. 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 Pasco 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

Simple interest is calculated as the principal multiplied by the interest rate multiplied by the time. In this case, the principal is $20,000, the interest rate is 7.25%, and the time is 30 days. So, the interest would be $20,000 * 7.25% * (30/360) = $120.83.

Pasco Co Borrowed $20,000 at a Rate of 7