Karen's Katering borrows \( \$ 4,500 \), at \( 8.5 \% \) interest, for 260 days. If the bank uses the exact interest method, how much interest will the bank collect? Round to the nearest cent. Select one: o a. \( \$ 304.17 \) b. \( \$ 287.95 \) O.c. \( \$ 290.56 \) d. \( \$ 272.47 \)

To calculate the interest using the exact interest method, we can use the formula: \[ I = P \times r \times t \] where \( I \) is the interest, \( P \) is the principal amount (\$4,500), \( r \) is the annual interest rate (8.5% or 0.085), and \( t \) is the time in years. First, convert the time from days to years: \[ t = \frac{260}{365} \approx 0.7123 \text{ years} \] Now, substitute the values into the formula: \[ I = 4500 \times 0.085 \times 0.7123 \approx 272.47 \] Therefore, the bank will collect approximately **\$272.47** in interest, corresponding to option d. Did you know that calculating interest accurately can save you from unexpected costs? Just like a well-planned meal, financial planning requires precise measurements! Furthermore, understanding how banks calculate interest is a key to personal finance. Knowing the difference between simple and compound interest can help you make better financial decisions and maximize your earnings!