00:01
Hi! so to solve for this, we will use the compounding interest formula.
00:06
The future value of the loan is equivalent to the initial value p multiplied by 1 plus r, the rate of interest, over n, the number of times the interest will be applied to the loan in one year, and then n raised to the power of t.
00:23
So in this case, n is just equivalent to 1 because it states here that the banker's interest is 360 days.
00:33
And then t is the time elapsed.
00:36
In this case, we have 130 days.
00:39
So let's convert first t in terms of years because t should be years and we have here days.
00:47
Convert this to years first.
00:53
So we have 0 .3611 year.
00:58
And then what's the value of a? a will be principal plus the interest.
01:04
So that's principal which is our unknown plus the interest, 11 .40 dollars.
01:10
Then we have here p1 plus the rate of interest, 12 percent...