On September 12, Jody Jansen went to Sunshine Bank to borrow $4,300 at 9% intere

Question

On September 12, Jody Jansen went to Sunshine Bank to borrow $4,300 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.)

b.

What is the total amount Jody must repay at maturity? (Do not round intermediate calculations.Round your answer to the nearest cent.)

a.

What interest will Jody owe on January 27? (Do not round intermediate calculations. Round your answer to the nearest cent.)

Explanation / Answer

Amount of Borrowing 4300 Date of borrowing 12-Sep Date of repayment 27-Jan Days for which borrowing Outstanding 137 (18+31+30+31+27) Interest rate 9% Total Interest to be paid: $ 4300*9%*137 days/365 = $ 145.26 Total amount repaid: Principal amount 4300 Add: Interest tot be paid 145.26 Total amount repaid 4445.26

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