Question

1.

A note with a face value of $145,000 is made on December 10.
The note is for 75 days and carries interest of 13.5%.

A partial payment of $55,000 is made on January 8.

Find the amount due on the maturity date of the note.

Answer 1

The answer is $93,112.96.

We first need to find how the number of days from the date of the note till the partial payment. December 31 - 10 days = 21, then add 8 January = 29 days

Next, we will be using this formula - A = p (1 + rt) in getting the amount due. p represents the face value; r for the rate; and t for the time. Subtract the partial payment after.

A = p (1 + rt)
A = 145,000 [1 + (13.5%x(29/365))]
A = 146,555.27
A = 146,555.27 - 55,000
A = 91,555.27

Compute for the remaining days to maturity. 75 days - 29 days = 46 days Use the same formula using the new A and t

A = 91,555.27 [1 + (13.5%x(46/365))]
A = $93,112.96 due after 75 days