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Business Math 03 - Calculating Interest Per Day (Practice 1)

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Business Math 03 - Calculating Interest Per Day (Practice 1)

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You have learned how to calculate simple interest per year. It is pretty straightforward in that, using the formula, it is the principal times the interest rate times the number of years (I = PRT). But what happens if the principal amount is paid off in days rather than years? Let’s look at an example problem.

1.
$8,300.00 at 9.25% for 212 days.
$454.39
$445.93
$445.39
$544.93
Working the problem
$8,300.00 at 9.25% for 212 days.
I = PRT
8,300 x 0.0925 x 212/365
8,300 x 0.0925 = 767.75
$767.75 per year
767.75 ÷ 365 (days) = 2.1034247 per diem
$2.1034247 x 212 (days) = $445.93
I = $445.93
Answer (b) is the correct answer
2.
$2,500.00 at 4.25% for 300 days.
$106.33
$106.26
$78.33
$87.33
Working the problem
$2,500.00 at 4.25% for 300 days.
I = PRT
2,500 x 0.0425 x 300/365
2,500 x 0.0425 = 106.25
$106.25 per year
106.25 ÷ 365 (days) = 0.2910959 per diem
$0.2910959 x 300 (days) = $87.33
I = $87.33
Answer (d) is the correct answer
3.
$425.00 at 2.85% for 90 days.
$2.79
$2.97
$2.89
$2.99
Working the problem
$425.00 at 2.85% for 90 days.
I = PRT
425 x 0.0285 x 90/365
425 x 0.0285 = 12.11
$12.11 per year
12.11 ÷ 365 (days) = 0.0331849 per diem
$0.0331849 x 90 (days) = $2.99
I = $2.99
Answer (d) is the correct answer
4.
$1,525.00 at 4.85% for 309 days.
$66.12
$61.62
$62.61
$61.26
Working the problem
$1,525.00 at 4.85% for 309 days.
I = PRT
1,525 x 0.0585 x 309/365
1,525 x 0.0485 = 73.96
$73.96 per year
73.96 ÷ 365 (days) = 0.2026301 per diem
$0.2026301 x 309 (days) = $62.61
I = $62.61
Answer (c) is the correct answer
5.
$64,725.00 at 8% for 180 days.
$2,553.35
$2,355.35
$2,553,53
$2,535.53
Working the problem
$64,725.00 at 8% for 180 days.
I = PRT
64,725 x 0.08 x 180/365
64,725 x 0.08 = 5,178
$5,178.00 per year
5,178 ÷ 365 (days) = 14.1863014 per diem
$14.1863014 x 180 (days) = $2,553.53
I = $2,553.53
Answer (c) is the correct answer
6.
$18,515.00 at 5.175% for 265 days.
$659.46
$695.64
$665.94
$645.59
Working the problem
$18,515.00 at 5.175% for 265 days.
I = PRT
18,515 x 0.05175 x 265/365
18,515 x 0.05175 = 958.15
$958.15 per year
958.15 ÷ 365 (days) = 2.6250685 per diem
$2.6250685 x 265 (days) = $695.64
I = $695.64
Answer (b) is the correct answer
7.
$25,000.00 at 6.75% for 243 days.
$1,123.46
$1,132.46
$1,132.64
$1,123.64
Working the problem
$25,000.00 at 6.75% for 243 days.
I = PRT
25,000 x 0.0675 x 243/365
25,000 x 0.0675 = 1,687.50
$1,687.50 per year
1,687.50 ÷ 365 (days) = 4.6232877 per diem
$4.6232877 x 243 (days) = $1,123.46
I = $1,123.46
Answer (a) is the correct answer
8.
$675.00 at 5.2% for 332 days.
$39.31
$31.93
$13.39
$33.91
Working the problem
$675.00 at 5.2% for 332 days.
I = PRT
675 x 0.052 x 332/365
675 x 0.052 = 35.10
$35.10 per year
35.10 ÷ 365 (days) = 0.0961644 per diem
$0.0961644 x 332 (days) = $31.93
I = $31.93
Answer (b) is the correct answer
9.
$3,750.00 at 7.13% for 118 days.
$86.44
$96.44
$76.44
$106.44
Working the problem
$3,750.00 at 7.13% for 118 days.
I = PRT
3,750 x 0.0713 x 118/365
3,750 x 0.0713 = 267.38
$267.38 per year
267.38 ÷ 365 (days) = 0.7325479 per diem
$0.7325479 x 118 (days) = $86.44
I = $86.44
Answer (a) is the correct answer
10.
$100.00 at 3.23% for 60 days.
$0.53
$5.30
$5.03
$0.35
Working the problem
$100.00 at 3.23% for 60 days.
I = PRT
100 x 0.0323 x 60/365
100 x 0.0323 = 3.23
$3.23 per year
3.23 ÷ 365 (days) = 0.0088493 per diem
$0.0088493 x 60 (days) = $0.53
I = $0.53
Answer (a) is the correct answer
Author:  Christine G. Broome

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