Nolan Walker decided to buy a used snowmobile since his credit union was offering such low interest rates. He borrowed $4,400 at 4.75% on December 26, 2019, and paid it off February 21, 2021. How much did he pay in interest? (Assume ordinary interest and no leap year.) (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.)
Interest paid:
We can calculate the desired result as follows:
Start of Loan = 26th December, 2019
End of Loan = 21st February, 2021
Total Amount = $ 4,400
Rate = 4.75%
Duration of loan in days = No. of loan taken in 2019 + No. of days loan taken in 2020 + No. of days loan taken in 2021
No. of loan taken in 2019 = 26 Dec 2019 to 31 Dec 2019 = 6 days
No. of loan taken in 2020 = 1 Jan 2020 to 31 Dec 2020 = 365 days (Considering no leap year)
No. of loan taken in 2021 = 1 Jan 2021 to 21 Feb 2021 = 52 days
Total duration of loan = 6 + 365 + 52
= 423 days
Interest on loan = Total Amount * rate * duration / 365
= 4400 * 4.75% * 423 / 365
= 4400 * 0.0475 * 1.15890411
= $ 242.21 or $ 242
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