The interest on a note is $800, the interest rate is 6% and the note is for 60 days. What is the principal of the note? (Use a 360 day year)

Question

Quizplus · Accepted Answer

We can use the formula:

Interest = Principal x Rate x Time

where Rate is the annual interest rate and Time is the time in years. Since the note is for 60 days, we need to express this in years by dividing by 360:

60 days ÷ 360 days/year = 1/6 year

Then, we can solve for the principal:

$800 = P x 0.06 x 1/6

$800 = P/100 x 6/100 x 1/6

$800 = P/10000

P = $80,000

Therefore, the principal of the note is $80,000. Answer C is correct.

The Interest on a Note Is $800, the Interest Rate