Question

andres michael bought a new boat. he took out a loan for $24,280 at 4.5% interest for 4 years. he made a $4,680 partial payment at 4 months and another partial payment of $2,950 at 9 months. how much is due at maturity?

Answer 1

The amount due at maturity is $17,023.13.

Step-by-step explanation:

To calculate how much is due at maturity, we need to calculate the remaining loan balance after the partial payments and the interest that accrues over the 4-year period. Here are the steps:

1. Calculate the remaining loan balance after the first partial payment:
   Remaining balance after 4 months = Original loan amount - Partial payment = $24,280 - $4,680 = $19,600
2. Calculate the interest accrued on the remaining balance after 4 months:
   Interest accrued after 4 months = Remaining balance after 4 months * (Interest rate/12) * Number of months = $19,600 * (4.5%/12) * (4-1) = $219.00
3. Calculate the remaining balance after the second partial payment:
   Remaining balance after 9 months = Remaining balance after 4 months - Partial payment = $19,600 - $2,950 = $16,650
4. Calculate the interest accrued on the remaining balance after 9 months:
   Interest accrued after 9 months = Remaining balance after 9 months * (Interest rate/12) * Number of months = $16,650 * (4.5%/12) * (9-4) = $373.13
5. Add the remaining balance after 9 months and the interest accrued:
   Total amount due at maturity = Remaining balance after 9 months + Interest accrued after 9 months = $16,650 + $373.13 = $17,023.13