Nichole borrowed $750 at 11% simple interest on February 20, 2014. She repaid th

Question

Nichole borrowed $750 at 11% simple interest on February 20, 2014. She repaid the debt on May 2, 2014. Using the Banker's rule, the amount she needed to settle the debt was: Nichole borrowed $750 at 11% simple interest on February 20, 2014. She repaid the debt on May 2, 2014. Using the Banker's rule, the amount she needed to settle the debt was: Nichole borrowed $750 at 11% simple interest on February 20, 2014. She repaid the debt on May 2, 2014. Using the Banker's rule, the amount she needed to settle the debt was:

Explanation / Answer

As per the Banker's rule time is expressed in fraction of the number of days a debt is taken for over 360 total days.

Here t = 71/360 ( 8 days feb + 31 days march + 30 days April + 2 days May)

Hence Amount to be repaid to settle the debt = Principal + Interest(Simple Interest as per Banker's rule)

= $750 + (750*11/100*71/360) [ using the Simple Interest formula I = p.r.t/100 ]

= $750 + $16.27083 = $766.27083

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