What is the interest on $520 for 1 year 3 months at 6%?
| Work: | ||||||
| 1 year 3 months = 11⁄4 year | ||||||
| $520 | principal | |||||
| .06 | ||||||
| 4 | ) | $31.20 | interest | 1 | year | |
| $7.80 | interest | 1⁄4 | year | |||
| $39.00 | interest | 1 | 1⁄4 | year | ||
The 60-Day Interest Method
In what is called the 60-Day Method, 360 days are considered one year, and 30 days one month. Upon this basis the interest for 60 days, or two months, at any rate, will be 1⁄6 of the interest for one year; and when the rate is 6% the interest for 60 days is one per cent or 1⁄100 of the principal. Thus, the interest of $247 for 60 days at 6% is $2.47.
Example: Find the interest of $1728 for 80 days at 6%.
Work:
| $17 | 28 | = interest for 60 days. |
| 5 | 76 | = interest for 20 days. |
| $23 | 04 | = interest for 80 days. |
Explanation:
The interest of $1728 for 60 days at 6% is 1% of $1728, or $17.28; and the interest for 20 days (1⁄3 of 60) is 1⁄3 of $17.28, or $5.76. Hence for 80 days it will be $17.28 plus $5.76, or $23.04.