Explanation Given Information: Principal amount of loan is $ 100 , 000 , rate of ordinary interest is 8 % , duration of loan is 90 days but after 40 days, partial payment of $ 35 , 000 was repaid. Formula used: The formula to compute simple interest is, I = P R T Where, I is the amount of interest, P is the principal amount, R is the rate of interest, and T is the time duration. The formula to calculate Maturity value is, M V = P ( 1 + R T ) Where, MV is Maturity value, P is Principal Amount, R is the rate of interest, and T is the time duration. Calculation: Consider that principal amount is $ 100 , 000 , rate of interest is 8 % , time duration is 40 days. Simplify the rate of interest as, 8 % = 8 100 = 0.08 Compute the time using ordinary interest method as, Time = Number of days of a loan 360 = 40 360 The simple interest defined as, I = P R T Substitute $ 100 , 000 for amount of interest, 0.08 for rate of interest, 40 360 for time duration in the formula I = P R T = 100 , 000 × 0.08 × 40 360 = $ 888.89 Hence, rate of interest is $ 888.89 . Out of the repayment of $ 35 , 000 that was made within 40 days, it included interest amount of $ 888

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305886803

Author: Brechner

Publisher: Cengage

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Chapter 10.II, Problem 33RE

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To calculate: The maturity value of the loan taken by Actor’s Playhouse theater where principal amount of loan was $100,000 at ordinary rate of ordinary of 8% for duration of 90 days but after 40 days, partial payment of $35,000 was repaid.

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Chapter 10.II, Problem 32RE

Chapter 10.II, Problem 34RE

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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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The maturity value of the loan taken by Actor’s Playhouse theater where principal amount of loan was $ 100 , 000 at ordinary rate of ordinary of 8 % for duration of 90 days but after 40 days, partial payment of $ 35 , 000 was repaid.

Solution Summary: The author calculates the maturity value of the loan taken by Actor's Playhouse theater, where principal amount is 100,000 at ordinary rate of 8%.

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To calculate: The maturity value of the loan taken by Actor’s Playhouse theater where principal amount of loan was $100,000 at ordinary rate of ordinary of 8% for duration of 90 days but after 40 days, partial payment of $35,000 was repaid.

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Chapter 10 Solutions