We are given that Bank A charges ordinary interest for a loan of $11000 at a rate of 9% for a period of 90 days, we can calculate the total interest using the formula for ordinary interest, this is:
[tex]\text{Interest =(amount)(rate)(days/360)}[/tex]Replacing that we get:
[tex]\text{Interest}=(11000)(0.9)(\frac{90}{360})[/tex]Solving we get:
[tex]\text{Interest}=2475[/tex]Now, bank B charges exact interest, the formula is:
[tex]\text{Interest}=(amount)(rate)(\frac{days}{365})[/tex]Replacing we get:
[tex]\text{Interest}=(11000)(0.9)(\frac{90}{365})[/tex]solving the operation:
[tex]\text{Interest}=2441[/tex]Therefore, she will pay less interest to Bank B. Bank B offers a better deal.
