One of your customers is delinquent on his accounts payable balance. You’ve mutu
ID: 2757358 • Letter: O
Question
One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.30 percent per month interest on the overdue balance.
If the current balance is $12,000, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Months for account to be paid off
_______months
One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.30 percent per month interest on the overdue balance.
If the current balance is $12,000, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Explanation / Answer
Month
Beg Bal
Installment
Interest
principal
End Balance
1
12,000
500
156
344
11,656
2
11,656
500
152
348
11,308
3
11,308
500
147
353
10,955
4
10,955
500
142
358
10,597
5
10,597
500
138
362
10,235
6
10,235
500
133
367
9,868
7
9,868
500
128
372
9,496
8
9,496
500
123
377
9,119
9
9,119
500
119
381
8,738
10
8,738
500
114
386
8,352
11
8,352
500
109
391
7,960
12
7,960
500
103
397
7,564
13
7,564
500
98
402
7,162
14
7,162
500
93
407
6,755
15
6,755
500
88
412
6,343
16
6,343
500
82
418
5,925
17
5,925
500
77
423
5,502
18
5,502
500
72
428
5,074
19
5,074
500
66
434
4,640
20
4,640
500
60
440
4,200
21
4,200
500
55
445
3,755
22
3,755
500
49
451
3,304
23
3,304
500
43
457
2,847
24
2,847
500
37
463
2,384
25
2,384
500
31
469
1,915
26
1,915
500
25
475
1,439
27
1,439
500
19
481
958
28
958
500
12
488
471
29
471
500
6
494
(23)
Assuming Repayment started at the end of the month.
It will be paid in 29 months
Month
Beg Bal
Installment
Interest
principal
End Balance
1
12,000
500
156
344
11,656
2
11,656
500
152
348
11,308
3
11,308
500
147
353
10,955
4
10,955
500
142
358
10,597
5
10,597
500
138
362
10,235
6
10,235
500
133
367
9,868
7
9,868
500
128
372
9,496
8
9,496
500
123
377
9,119
9
9,119
500
119
381
8,738
10
8,738
500
114
386
8,352
11
8,352
500
109
391
7,960
12
7,960
500
103
397
7,564
13
7,564
500
98
402
7,162
14
7,162
500
93
407
6,755
15
6,755
500
88
412
6,343
16
6,343
500
82
418
5,925
17
5,925
500
77
423
5,502
18
5,502
500
72
428
5,074
19
5,074
500
66
434
4,640
20
4,640
500
60
440
4,200
21
4,200
500
55
445
3,755
22
3,755
500
49
451
3,304
23
3,304
500
43
457
2,847
24
2,847
500
37
463
2,384
25
2,384
500
31
469
1,915
26
1,915
500
25
475
1,439
27
1,439
500
19
481
958
28
958
500
12
488
471
29
471
500
6
494
(23)
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