Question

What is the total paymentrequired to pay off a promissorynote issued for $750.00 at 6%ordinary interest and a 90-dayterm?A. $761.25B. $780.00C. $755.40D. $756.00

Answer 1

Given pricipal p= $750.00

rate per annum, r = 6%

monthly rate = 6/12 = 0.5% per month

time, t= 90 days = 90/3 = 3 months

The interest can be calculated by

`\begin{gathered} \text{ Interest, I = }\frac{\text{prt}}{100}\text{ =}\frac{\text{750 x 0.5 x 3}}{100}\text{ = }(1125)/(100) \\ I\text{ = \$}11.25 \\ \text{Total payment = Principal + interest} \\ \text{ = \$}750.00\text{ + \$11.25} \\ =\text{ \$761.25} \end{gathered}`

Hence, the answer is $761.25