Subjects finance

Simple Interest Ahmad 2Dd177

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1. **Problem Statement:** Ahmad invests 5500 at a simple interest rate of 4.5% per annum. a) Calculate the exact time in days from 15th March 2025 to 20th August 2025. b) Using the exact time, find the ordinary interest earned. 2. **Formula for Simple Interest:** $$I = P \times r \times t$$ where $I$ is interest, $P$ is principal, $r$ is annual interest rate (decimal), and $t$ is time in years. 3. **Step a) Calculate exact time in days:** - From 15 March to 31 March: $31 - 15 = 16$ days - April: 30 days - May: 31 days - June: 30 days - July: 31 days - From 1 August to 20 August: 20 days Total days = $16 + 30 + 31 + 30 + 31 + 20 = 158$ days 4. **Convert days to years:** $$t = \frac{158}{365} \approx 0.4329 \text{ years}$$ 5. **Step b) Calculate ordinary interest:** $$I = 5500 \times 0.045 \times 0.4329 = 107.11$$ So, the interest earned is approximately 107.11. **Final answers:** - Exact time: 158 days - Ordinary interest earned: 107.11