Question

Question 5 (multiple choice)
Gene McDonald’s bank granted him a single-payment loan of $5,000 for 90 days at 9% ordinary interest. What is the amount of ordinary interest owed?

A. $112.50
B. $132.50
C. $150.00
D. $156.20

Answer 1

Ordinary interest means that there are 360 days in a year.

Now let's calculate the interest owed using the formula of
I=prt
I interest owed ?
P principle 5000
R interest rate 0.09
T time 90/360

I=5,000×0.09×(90÷360)
I=112.5

So the answer is a

Hope it helps!