What is the amount of interest on a loan of \( \$ 5,000 \), at \( 10 \% \) interest, for 278 days using the ordinary interest method. selectone Oa. \( \$ 500 \) ob. \( \$ 1.80 \) oc. \( \$ 5.500 \) od. \( \$ 385.11 \)

To find the interest using the ordinary interest method, we use the formula: \[ I = P \times r \times t \] where \( I \) is the interest, \( P \) is the principal amount (\$5,000), \( r \) is the rate (10% or 0.10), and \( t \) is the time in years. Since we are calculating for 278 days, we convert that into a fraction of a year: \[ t = \frac{278}{360} \approx 0.7722 \text{ years} \] Now, plugging in the numbers: \[ I = 5000 \times 0.10 \times 0.7722 \approx 386.10 \] Thus, the closest option from your choices is **od. \( \$ 385.11 \)**. --- Did you know that the ordinary interest method is commonly used in banking and finance? It calculates interest based on a 360-day year, often simplifying the math while providing a standard way of determining interest accrued over shorter periods. It’s especially handy for commercial loans! If you're planning a loan, remember to always read the fine print! Many borrowers get caught up in the allure of low-interest rates or promotional offers, neglecting fees or the method used to calculate that interest. Calculate it beforehand, so you're not in for any surprises later!