document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1085959>Question 1085959</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Find the ordinary and exact interest on 8800 for 85 days at 11¾% simple interest. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #700061 by </B><A HREF=/tutors/aboutme.mpl?userid=jim_thompson5910><B>jim_thompson5910(35256)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=jim_thompson5910><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=700061\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <font color=\"black\" face=\"times\" size=\"3\">With ordinary interest, there are 360 days in a year<BR>\n" );
document.write( "With exact interest, there are 365 days in a year\r<BR>\n" );
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document.write( "The formula we use is<BR>\n" );
document.write( "simple interest = P*r*t<BR>\n" );
document.write( "P = principal<BR>\n" );
document.write( "r = interest rate in decimal form<BR>\n" );
document.write( "t = time in years\r<BR>\n" );
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document.write( "The interest rate of 11¾% is equivalent to<BR>\n" );
document.write( "11¾% = [(11)+(3/4)]% = [11+0.75]% = 11.75%<BR>\n" );
document.write( "Convert from percent to decimal form<BR>\n" );
document.write( "11.75% = 11.75/100 = 0.1175\r<BR>\n" );
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document.write( "So r = 0.1175<BR>\n" );
document.write( "The time value t for ordinary interest is t = 85/360 years\r<BR>\n" );
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document.write( "Ordinary interest = P*r*t<BR>\n" );
document.write( "Ordinary interest = 8800*0.1175*(85/360)<BR>\n" );
document.write( "Ordinary interest = 244.138888888889<BR>\n" );
document.write( "Ordinary interest = 244.14\r<BR>\n" );
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document.write( "Repeat the steps above, but now use t = 85/365 to get the exact interest earned\r<BR>\n" );
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document.write( "Exact interest = P*r*t<BR>\n" );
document.write( "Exact interest = 8800*0.1175*(85/365)<BR>\n" );
document.write( "Exact interest = 240.794520547946<BR>\n" );
document.write( "Exact interest = 240.79\r<BR>\n" );
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document.write( "In summary:<BR>\n" );
document.write( "Ordinary interest = 244.14<BR>\n" );
document.write( "Exact interest = 240.79\r<BR>\n" );
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document.write( "You earn more with ordinary interest because there are 5 less days to compute interest for that given year.</font> </SPAN>\n" );
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