Question 1: (10 Points)
a) State the simple interest formula and explain how simple interest is calculated.
b) Calculate the simple interest for a loan for $24,700, for 2 1/4 years at 3.4% interest per year. Round to the nearest cent.
c) How much is owed in total at the maturity date?
Question 2: (10 Points)
You decide to take out a loan for $12,500, at 4.25% yearly interest, on the date September 16. You will repay the loan on December 31st (at the end of the current year).
a) Exact time (days) of loan: _________
b) Using ordinary interest, calculate the interest and total owed.
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