Question

Andres Michael bought a new boat. He took out a loan for $23,680 at 2.5% interest for 3 years. He made a $4,350 partial payment at 3 months and another partial payment of $2,590 at 6 months. How much is due at maturity? (Do not round intermediate calculations. Round your answer to the nearest cent.)

A) $15,740.50
B) $16,250.75
C) $17,380.25
D) $18,110.60

Answer 1

The amount due at maturity for the loan is $19,359.

Step-by-step explanation:

To calculate the amount due at maturity, we need to find the remaining balance at the end of 3 years.

Step 1: Calculate the interest for the first 3 months. The interest is 2.5% of $23,680, which is $592. To find the new balance, subtract the partial payment of $4,350 from the original loan amount and add the interest: $23,680 - $4,350 + $592 = $20,922.

Step 2: Calculate the interest for the next 3 months. The interest is 2.5% of $20,922, which is $523. To find the new balance, subtract the partial payment of $2,590 from the previous balance and add the interest: $20,922 - $2,590 + $523 = $19,855.

Step 3: Calculate the interest for the remaining 2 years and 6 months. The interest is 2.5% of $19,855, which is $496. To find the final balance, subtract the remaining partial payment of $496 from the previous balance: $19,855 - $496 = $19,359.

Therefore, the amount due at maturity is $19,359.