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On May 30,2012 a businessman loans $15,000 in the bank for the expansion of his restaurant.it was agreed that he will pay the amount with 6% rate of interest on August 10,2012.what is the ordinary simple interest to be paid?

$180
$160
$1800
$220
Explanation:

Principal amount is $15,000.


Rate of interest is 6%.


Counting the number of days from May 30 to August 10;


Note: Since May 30 is the beginning date, it is not included in counting.


May 31 1


June 1-30 30


July 1-31 31


August 1-10


10 Total 72 days


Converting days into years:


72 days x (1year360days) = 15years


Using the formula for solving the simple interest;


Interest = Principal x Rate x Time


Interest = $15,000 x 6% x 15


Interest = $15,000 x 0.06 x 15


Interest = $180


Therefore, the businessman will pay $180 interest.

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