Question

What is the total paymentrequired to pay off a promissorynote issued for $500.00 at 8%ordinary interest and a 90-dayterm?

Answer 1

Given in the question, we have the amount to be

`=\text{ \$}500`

The interest rate given is

`=8\%=(8)/(100)=0.08`

The time is given below as

`\begin{gathered} t=90days \\ t=(90)/(365)=0.25 \end{gathered}`

Step 1:

We will calculate the simple interest

`\begin{gathered} I=(PRT)/(100) \\ I=(500*8*0.25)/(100) \\ I=\text{ \$}10.00 \end{gathered}`

Step 2:

We will calculate the total repayment using the formula below

`\begin{gathered} T.P=A+I \\ T.P=\text{ \$}500+\text{ \$}10 \\ T.P=\text{ \$}510.00 \end{gathered}`

Hence,

The final answer is

`\Rightarrow\text{ \$}510.00`

OPTION C is the right answer