Why Should You Be Cautious About The Units Of Rate And Time In Simple Interest Problems

Discussion questions/paragraph format Name QRB/501 Tutors Name Date Discussion board and answers Make sure each question has an answer that is a very good size paragraph/response and a source for each one. Describe Evaluating simple interest. Simple interest is a factor of interest rate and time. Simple interest is calculated by multiplying the rate of interest with the time periods. To understand how simple interest works, take an example of a loan with a 15,000 principal balance and an annual 5 simple interest rate. If one makes a payment that is due on May 1 precisely on the due date, the interest is calculated on the 30 days of April. Thus interest for 30 days is 61.64, if however, one makes the payment on April 21, the interest charged will be for 20 days in April, dropping the interest payment to 41.09, therefore resulting in a 20 savings. References Cleaves, Cheryl, Margie Hobbs, Jeffrey Noble. Business Math, 11th Edition. Pearson Learning Solutions, 12/2016. VitalBook file. Why should you be cautious about the units of rate and time in simple interest problems They must match. The formulas used for solving simple interest use periods as the unit of time. Periods might