Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest)results in a rate of:
A)10%
B)12%
C)12 1/2%
D)13%
E)None of these

Question

Quizplus · Accepted Answer

Ordinary interest is calculated using the formula: Interest = Principal x Rate x Time. Here, Time is in years, so 306 days is 306/360 years. Solving for Rate: $1,632 = $16,000 x Rate x (306/360), which gives Rate = 0.12 or 12%.

Interest of $1,632 with Principal of $16,000 for 306 Days