Questions: Tessa obtains a loan for home renovations from a bank that charges simple interest at an annual rate of 3.6%. Her loan is for 15,600 for 78 days. Assume 1 year = 365 days. a) Find the interest that will be owed after 78 days. b) Assuming Teresa doesn't make any payments, find the amount owed after 78 days. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas. 201.13 15,721.13

Solution Steps

To find the daily interest rate, we divide the annual interest rate by the number of days in a year.

$$r_{daily} = \frac{r}{n} = \frac{0.036}{365}$$

This gives us a daily interest rate of 0.

Next, we calculate the total interest accrued over the loan duration using the formula:

$$I = P \times r_{daily} \times t = 15600 \times 0 \times 78$$

The total interest accrued over the period is $120.01.

Finally, we find the total amount owed by adding the interest to the principal:

$$A = P + I = 15600 + 120.01$$

The total amount owed after 78 days is $15720.01.

Final Answer: