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If the daily rate of interest on a loan is 0.1%, what is the annual rate.

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steve1234 | Student, Undergraduate | (Level 1) Salutatorian

Posted September 23, 2013 at 3:29 PM via web

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If the daily rate of interest on a loan is 0.1%, what is the annual rate.

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted September 23, 2013 at 3:34 PM (Answer #1)

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The daily rate of interest on a loan is 0.1%. Let the number of days in a year be 365. The equivalent annual rate of interest is x% where

x = `(1 +0.1/100)^365 - 1`

= 0.44025

The annual interest rate equivalent to a daily interest rate of 0.1% is 44.025%

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