To determine the amount of interest owed on a 90-day, 10 percent note for [tex]$11,000, we can use the formula for simple interest. The formula for simple interest is:
\[ \text{Interest} = \frac{\text{Principal} \times \text{Rate} \times \text{Time}}{\text{Number of Days in a Year}} \]
Where:
- Principal is the initial amount of the loan or investment,
- Rate is the annual interest rate in decimal form,
- Time is the duration of the loan or investment in days,
- Number of Days in a Year is generally 360 days (as assumed in this problem).
Let's break down the required steps:
1. Principal: This is the initial amount of the loan, which is $[/tex]11,000.
2. Rate: The annual interest rate is 10%. To convert this percentage to a decimal, we divide by 100:
[tex]\[ 10\% = \frac{10}{100} = 0.10 \][/tex]
3. Time: The loan duration is 90 days.
4. Number of Days in a Year: For this problem, we are assuming there are 360 days in a year.
Now, let's substitute the given values into the simple interest formula:
[tex]\[ \text{Interest} = \frac{11,000 \times 0.10 \times 90}{360} \][/tex]
First, let's calculate the numerator:
[tex]\[ 11,000 \times 0.10 = 1,100 \][/tex]
Next, multiply this result by the number of days:
[tex]\[ 1,100 \times 90 = 99,000 \][/tex]
Finally, divide the result by the number of days in a year (360):
[tex]\[ \frac{99,000}{360} = 275.0 \][/tex]
Therefore, the amount of interest owed on the 90-day, 10 percent note for [tex]$11,000 is $[/tex]275.0.
