Max Wholesaler borrowed $7,500 on a 8%, 120-day note. After 45 days, Max paid $2,625 on the note. Thirty days later, Max paid an additional $2,250. Use ordinary interest. a. Determine the total interest using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest cent. Round your final answer to the nearest cent.) Total interest amount %24 b. Determine the ending balance due using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest cent. Round your final answer to the nearest cent.) Ending balance due 2$
Max Wholesaler borrowed $7,500 on a 8%, 120-day note. After 45 days, Max paid $2,625 on the note. Thirty days later, Max paid an additional $2,250. Use ordinary interest. a. Determine the total interest using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest cent. Round your final answer to the nearest cent.) Total interest amount %24 b. Determine the ending balance due using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest cent. Round your final answer to the nearest cent.) Ending balance due 2$
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Max Wholesaler borrowed $7,500 on a 8%, 120-day note. After 45 days, Max paid $2,625 on the note. Thirty days later, Max paid an
additional $2,250. Use ordinary interest.
a. Determine the total interest using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest cent.
Round your final answer to the nearest cent.)
Total interest amount
24
b. Determine the ending balance due using the U.S. Rule. (Round your intermediate balances and interest amounts to the nearest
cent. Round your final answer to the nearest cent.)
Ending balance due
24
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A borrower or deposit-taking financial institution pays interest to a lender or depositor over and above the original sum (that is, the amount borrowed) at a specified rate. It is not to be confused with a fee paid to the lender or a third party by the borrower. It differs from a dividend, which is a payment paid by a company to its shareholders (owners) from its profit or reserve, but not at a predetermined rate, but rather on a pro rata basis as a piece of the reward received by risk-takers when revenue exceeds total costs.
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