Question

Find the exact interest for $185,000 at 7.5% for 180 days

Answer 1

In order to calculate the exact interest, we can use the formula below:

$A=P\cdot r\cdot t$

Where A is the amount of interest generated, P is the principal (initial amount), r is the rate and t is the time in years.

The exact interest considers 365 days, so let's convert 180 days to years:

$\frac{180}{365}=0.49315\text{ years}$

Now, calculating the interest, we have:

$\begin{gathered} A=185000\cdot0.075\cdot0.49315 \\ A=6842.46 \end{gathered}$

Therefore the exact interest is $6842.46.