BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Ordinary simple interest is a SI that takes only 360 days as the equivalent number of days in a year. On the other hand, exact simple interest is a SI that takes exact days in 365 for a normal year or 366 for a leap year.

Detailed explanation-2: -On the other hand, Exact simple interest is a simple interest that uses exact number of days in a year which is 365 (or 366 for leap year). These two kinds of simple interest are only applicable if the unit of time used is in days.

Detailed explanation-3: -This is the simplest way a lender calculates interest. Because there are 365 days in a normal year, and 365 cannot conveniently be divided by 12 months into a whole number, the lender simply assumes that there are 12 equal, 30-day months (or a 360-day year).

Detailed explanation-4: -The exact interest method represents time as the exact number of days divided by 365. Ordinary interest results in a slightly higher rate of interest than exact interest. The federal government likes to use ordinary interest. Dollar markup divided by the selling price equals percent markup on cost.