You borrow $800 today at r = 12% from a bank that uses ordinary interest (Banker's rule).You pay back at least $845 in n-days.What is the value of n?
A)168 days
B)169 days
C)171 days
D)172 days

Question

Quizplus · Accepted Answer

Using the Banker's rule, the interest is calculated based on the original loan amount ($800) irrespective of any payments made.

Let the number of days be n.

Interest = Principal x Rate x Time
$45 = $800 x 0.12 x (n/365)
n = (45 x 365) / (800 x 0.12)
n ≈ 169

Therefore, the value of n is approximately 169 days, which is closest to option B).

You Borrow $800 Today at R = 12% from a Bank