Question

Max wholesaler borrowed $2,00 on a 10%, 120-day note. After 45 days, Max paid $700 on the note. Thirty days later, Max paid an additional $630. What is the final balance due? Use the US rule to determine the total interest and ending balance due. Use ordinary interest.

Answer 1

The final balance due on the note is $1329.76.

Step-by-step explanation:

Max borrowed $2,000 on a 10%, 120-day note. After 45 days, Max paid $700 on the note.

Thirty days later, Max paid an additional $630.

To determine the final balance due, we first need to find the interest that has accumulated at each payment.

First payment: 45 days at 10% is 45/365 * 0.10 = $0.1233.

Subtracting this from the $700 payment results in a remaining balance of $699.843.

Second payment: 30 days at 10% is 30/365 * 0.10 = $0.0822.

Subtracting this from the $630 payment results in a remaining balance of $629.918.

To find the final balance due, we need to add the remaining balances from each payment. So, $699.843 + $629.918 = $1329.76.

Therefore, the final balance due is $1329.76.