Question

11) Leon Harding proceeds of $5762 after signing a 210-day note for $6000. Find the discount rate. Round to the nearest tenth.

13) How much much Harry's Hardware deposit at 8.5% interest for 120 days in order to earn $800.00 interest? Round to the nearest dollar.

Step by step with formulas.

Answer 1

11 Ans)

Interest discount = 6000-5762 = $ 238

Interest = Principal x Rate x Period

Total days in a year = 365

238 = 6000 * R * (210/365)

R= 0.0689

or Rate = 6.89 %

To nearest tenth R= 6.9% is the discount rate

13 Ans)

Interest earned = $800

Rate = 8.5% = 0.085

Rate is given on per annum basis hence period should also be on yearly basis

Period = 120 days

Interest = Principal x Rate x Period

800 = P * 0.085 * (120/365)

P = $ 28627.45

To nearest dollar
P= $ 28627 is the amount he deposited