Section 8.1 Loans and Interest
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Step 2: Determine the term of the loan. Divide the number of days of the loan
by 360. Round to the nearest thousandth (0.001) if necessary.
term =
number of days of the loan
365
term=
65
365
term ≈ 0.178
Step 3: Determine the amount of interest. Multiply the principal, annual interest
rate, and term of the loan.
amount of interest = principal × annual interest rate × term
amount of interest = $2,450 × 0.076 × 0.178
amount of interest = $33.14
Check It
Mikel borrowed $1,675 from his credit union at an annual percentage rate
of 8.3%. He repaid the loan 77 days after he borrowed the money. Calculate the
amount of interest that Mikel paid for the loan.
Example 8-1F
See It
On April 17, Robert obtained a loan for $1,150 from his bank. The annual
percentage rate was 9.25%. He repaid the loan in one payment on July 2.
Determine the amount of interest that Robert paid on the loan.
Strategy
Use the formulas:
term =
number of days of the loan
365
I = Prt
Solution
Step 1: Determine the number of days of Robert’s loan. Use the calendar to
count the number of days between April 17 and July 2.
number of days of loan = April + May + June + July
number of days of loan = (30 – 17) + 31 + 30 + 2
number of days of loan = 13 + 31 + 30 + 2
number of days of loan = 76
fyi
If the beginning date and
ending date of a loan are
known, then the number
of days of the loan can be
calculated.