Compute the ordinary interest, the exact interest, and their difference. Round a

Question

Compute the ordinary interest, the exact interest, and their difference. Round answers to the nearest cent.

For this problem, first find the actual exact simple interest. Then, estimate the interest by assuming a 360-day year and round each rate and time to the nearest numbers that will permit the shortcuts in Table 13-1. Finally, find the difference. Round answers to the nearest cent.

Find the time in days. Round your intermediate calculation to two decimal places and final answer to the nearest whole day. Use a 360-day year.

Principal Rate Time Ordinary Interest Exact Interest Difference $270 8% 22 days $_________ $________ $_______

Explanation / Answer

Answer

Answer

Answer

Principal (P) 270 Rate ( R) 8% Time (Days) 20 Ordinary Interest: 270*8%*(20/360) 1.2 Exact Interest: 270*8%*(20/365) 1.18 Difference 0.02

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