Chris Shopper received a $800 discount loan to purchase a washer and dryer. The loan was offered at 10% for 120 days. What are the proceeds?
To find the proceeds, we need to subtract the discount from the loan amount.
The loan amount is $800.
The discount is 10% of the loan amount. To calculate the discount, we multiply the loan amount by the discount rate:
10% of $800 = $800 × 0.1 = $80.
To find the proceeds, we subtract the discount from the loan amount:
Loan amount - Discount = Proceeds
$800 - $80 = $720.
Therefore, the proceeds are $720.
To calculate the proceeds of the loan, we need to first understand what a discount loan is. In a discount loan, the loan amount is deducted from the total amount due, and the borrower receives the remaining amount, which is known as the proceeds.
In this case, Chris Shopper received a $800 discount loan. The loan was offered at a 10% discount for 120 days. To calculate the discount amount, we can use the formula:
Discount = Loan Amount * Rate * Time
In this formula, the Loan Amount is $800, the Rate is 10% (which is equivalent to 0.10 in decimal form), and the Time is 120 days (which should be converted to years, by dividing by 365).
Now let's calculate the discount amount:
Discount = $800 * 0.10 * (120/365)
= $800 * 0.10 * 0.3288 (rounded to four decimal places)
So, the discount amount is approximately $26.304.
To find the proceeds, we subtract the discount amount from the loan amount:
Proceeds = Loan Amount - Discount
= $800 - $26.304
Therefore, the proceeds from the loan are approximately $773.696.