Question

On April 3, the Mears flag company borrowed 9000 to pay for start up costs for its new show room. The loan had a simple interest rate of 6.25% and was for 230 days. The company was able to make partial payments of 5000 on May 28 and 2500 on October 12. How much will the company oh on the date of maturity? Assume 360 days in a year

Answer 1

$1,859.39

Explanation:

The loan amount is $9000 and the simple interest rate is 6.25%, loan term is 230 days:

#First find the total amount to be paid back;

`A=I+P, I=PRT, R=6.25\%, ,P=9000,T=230days\\\\A=9000* 0.0625* (230)/(360)+9000\\\\A=359.38+9000\\\\A=9359.39`

#The balance still owed after the partial payments is:

`Balance=A-5000-2500\\\\=9359.39-5000-2500\\\\=1859.39`

Hence, the amount still owed at maturity is $1,859.39