Question

Jones of Boston borrowed $40,000, on a 90-day 10% note. After 60 days, Jones made an initial payment of $6,000. On day 80, Jones made an additional payment of $7,000. Assuming the U.S. Rule, what's the adjusted balance of the first payment? (Use 360 days.)

Answer 1

$34,666.67

Explanation:

Step 1: Calculate the interest for 60 days.

(40000*60/360 )* 0.10 = $666.67

Step 2: Amount = Principal + Interest = $40,000 + 666.67 = $40,666.67

Step 3 : After 60 days, he paid $6000.

Remaining balance of the first payment = 40666.67 - 6000 = $34,666.67

Thank you.