Explanation Interest refers to the amount paid by the borrower of the funds to the lender. Interest is paid by the borrower regularly over the period of time above the principal repayment. In this, a person uses another person’s money in its business and pay interest on the same amount. The formula to compute the interest is Interest = Principal × Rate × Time . Consider an example: The principal amount of loan is $ 5 , 000 , the rate of interest is 8 % and the time period is 2 years. Compute the interest by substituting $ 5 , 000 for principal, 0.08 for the rate of interest and 2 for time in the formula Interest = Principal × Rate × Time . Interest = Principal × Rate × Time = 5,000 × 0 .08 × 2 = $800 Hence, the amount of interest is $ 800 . Principal refers to the amount that is borrowed by the borrower. Consider an example: The rate of interest is 12 % , the time period is 2 years and interest amount is $ 300

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

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Chapter 10, Problem 10CR

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To fill: The blanks given in the statement “The U.S. rule states that when a partial payment is made on a loan, the payment is first used to pay off the accumulated to date and the balance is used to reduce the___________.”

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Chapter 10 Solutions

Contemporary Mathematics for Business & Consumers

Ch. 10.I - Find the amount of interest on each of the...Ch. 10.I - Joe Hale goes to a credit union and borrows...Ch. 10.I - Prob. 3TIE Ch. 10.I - Prob. 4TIE Ch. 10.I - a. A loan was made on April 4 and had a due date...Ch. 10.I - a. What is the maturity date of a loan taken out...Ch. 10.I - Prob. 1RE Ch. 10.I - Prob. 2RE Ch. 10.I - Prob. 3RE Ch. 10.I - Prob. 4RE

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