Question

newcorp provided its ceo with a 92-day term loan with a simple interest rate of 4.5%. the ceo paid $143.05 in interest, which was calculated using the simplified exact method. how much did the company loan their ceo?

Answer 1

The loan amount that Newcorp provided to its CEO is $12,615, considering rate of interest and time period.

Calculation:

Time period = 92 days

Simple interest rate = 4.5%

Simple interest amount = $143.05

Simple interest = Principal* interest rate*time period

$143.05 = principal*4.5%*92/365

Principal = $12,615.

 Simple interest is the price of borrowing money that doesn't take compounding into account. In other words, just the principal is impacted by simple interest. A fee you repay on a borrowing or income you get from deposits is represented by interest.

  Simple interest is a method of calculating interest that doesn't take into consideration several periods of interest payments or obligations. 

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