On September 12, Jody Jansen went to Sunshine Bank to borrow $2,300 at 9% interest Jody plans to repay the loan on January 27. Assume the loan is on ordinary interest: (Use Days in a year table) a. What interest will Jody owe on January 27? (Do not round intermediate calculations. Round your answer to the nearest cent:) Interest 866.00 2 decimal places required. b. What is the total amount Jody must repay at maturity? (Do not round intermediate calculations Round your answer to the nearest cent:) Maturity value 3,166.00 2 decimal places required.

Ordinary interest, commonly referred to as simple interest, is computed by dividing the annual marginal rate by the 365 days that make up a year. It does not take compounding into account.

The number of days can be calculated as follows:

19(Sep), 31(Oct), 30(Nov), and 31(Dec) add up to 111 days in year 1.

Second-year days: 26 (Jan)

137 days in total

Rate = 0.09 Principal = $2,300

time = 137 ÷ 365

Interest = 2300 × 0.09 × (137 ÷ 365) = $77.69

Amount due at maturity is $2,300 plus $77.69, for a total of $2,377.69.

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