Banks and other financial institutions sometimes calculate simple interest based on:
A)Using 350 days in the year
B)Using 31 days for each month
C)Using 366 days in the year
D)Banker's rule, ordinary interest
E)None of these

Question

Quizplus · Accepted Answer

Banker's rule, also known as ordinary interest, is the most commonly used method of calculating simple interest in financial institutions. It assumes a 360-day year and is based on the actual number of days elapsed between the transaction date and the due date. The other choices (A, B, C, E) are not commonly used methods of calculating simple interest.

Banks and Other Financial Institutions Sometimes Calculate Simple Interest Based