Shawn Bixby borrowed $30,000 on a 150-day, 12% note. After 65 days, Shawn paid $
ID: 2737268 • Letter: S
Question
Shawn Bixby borrowed $30,000 on a 150-day, 12% note. After 65 days, Shawn paid $3,300 on the note. On day 106, Shawn paid an additional $5,300. Use ordinary interest.
a.
Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your answer to the nearest cent.)
b.
Determine the ending balance due use the U.S. Rule. (Do not round intermediate calculations.Round your answer to the nearest cent.)
Shawn Bixby borrowed $30,000 on a 150-day, 12% note. After 65 days, Shawn paid $3,300 on the note. On day 106, Shawn paid an additional $5,300. Use ordinary interest.
a.
Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your answer to the nearest cent.)
Total interest $b.
Determine the ending balance due use the U.S. Rule. (Do not round intermediate calculations.Round your answer to the nearest cent.)
Ending balance dueExplanation / Answer
Interest for 65 days = 30,000 x 12% x 65/360
=650
Principle repaid = Total payment – Interest expense
= 3300 -650
= $2650
Principle outstanding = $30,000 - $2650
= $27,350
Interest for next 41 days (106 - 65) = 27350 x 12% x 41/360
= 373.78
Principle repaid = $5300 – $373.78
= $4,926.22
a)
Total interest paid = 650 + 373.78
=1,023.78
b)
Ending balance due after 106 days = principal outstanding after 65 days – repayment on 106th day
= $27,350 – $4,926.22
= $22,423.78
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