On May 15, Criqui Outback Clothiers borrowed some money on a 4-month note to pro

Question

On May 15, Criqui Outback Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480. Your answer is correct. Determine the amount borrowed by Criqui. (Round intermediate calculation to 6 decimal places, e.g. 1.251241 and final answer to 0 decimal places, e.g. 125.) Amount borrowed by Criqui Assume the amount borrowed was $18,500. What was the interest rate if the amount of interest owed was $555? (Round answer to O decimal places, e.g. 152.)

Explanation / Answer

a) Amount Borrowed is $18,000 Statement showing computations Particulars Amount Total interest Amount                   480.00 Interest Rate 8% Time in Months                        4.00 Intt = P*r*t/100 480 = p*8%*4/12 576,000 = 32P P = 18,000 b) Interest rate = 9% Statement showing computations Particulars Amount Total interest Amount                   555.00 Principal             18,500.00 Time in Months                        4.00 Intt = P*r*t/100 555 = 18,500*r *4/12 6,660 = 74,000*r r = 9%

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