PR newswire reported on a company that received a short-term loan the loan was dated April 12th 2006 to April 30th 2006 the rate of interest was 6.5% the interest earned was $162.50 using the ordinary interest what was the original amount of the loan

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Business

Leah

2 August, 12:10

PR newswire reported on a company that received a short-term loan the loan was dated April 12th 2006 to April 30th 2006 the rate of interest was 6.5% the interest earned was $162.50 using the ordinary interest what was the original amount of the loan

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Answers (1)

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Audrina · Answer 1

The amount of Original Interest is $47,368.421

Explanation:

The original amount of the loan is computed as by using the ordinary interest:

Ordinary Interest = Original Amount * 360 / Rate of Interest * Number of Days

where

Original Amount is $162.50

Rate of Interest is 6.5%

Number of Days is 19 (April, 12 2006 to April, 30 2006)

Putting the values in the above:

= $162.50 * 360 * 100 / 6.5 * 19

= $5,850,000 / 123.5

= $47,368.421