Show Work please Question l: Points a) State the simple interest formula and exp
ID: 3254907 • Letter: S
Question
Show Work please
Question l: Points a) State the simple interest formula and explain how simple interest is calculated. The simple interest formula is I Prt (Interest Principal rate time). This is one way that interest is calculated on a loan or investment. b Calculate the simple interest for a loan for S39,445 for 3 1/2 years at 7.5% interest per year. Round to the nearest cent. c) What is the total owed at the maturity date? Question 2: (10 Points) You decide to take out a loan for $6,000, at 7% yearly interest on the date October 14. If you repay the loan on December 31st at the end of the current year a) Exact time (days) of loan b Using ordinary interest, calculate the interest and total owed. c0 Using exact interest, calculate the interest and total owed.Explanation / Answer
Q.1, (a) ANswer is given here
(b) SImple Interest I = Principal * Rate * Time = 39445 * 0.075 * 3.5 = 10354.31
(c) Total owed on maturity date = 39445 + 10354.31 = $49799.31
Q.2 (a) Exact days of loan = days between December 31st to October 14
so Number of october days + november days + december days
= 17 + 30 + 31 = 78 days
(b) Ordinary interest count 360 days not 365 days
so Interest = 6000 * 0.07 * (78/360) = $91
Total Owed = 6000 + 91 = $ 6091
(c) Exact interest use 365 days
so Interest = 6000 * 0.07 * (78/365) = $89.75
Total Owed = 6000 + 89.75 = $ 6089.75
Q>3
(a) Principal amount = $35000 Interest rate = 4% Time = 45 days note
so interest after 45 days = 35000 * 0.04 * (45/360) = $175
so total owed after 45 days = 35000 + 175 = $35175
We have done a payment of $15000 so
New principle amount is P = 35175 - 15000 = $ 20175
(b) Payment after 90 days where principal amount is $20175
so interest for next 45 days = 20175 * 0.04 * (45/360) = $ 100.88
so Total final payment = 20175 + 100.88 = $20275.88
is there is no part payment then
total payment = 35000 * 0.04 * (90/360)= $ 350
so total amount paid = 35000 + 350 = $35350
Difference in both amount = 35350 - (20275.88 + 15000) = $ 74.12
Q.4
(a) Simple discount rate = The calculation of present (or discounted) value over durations of less than one year is sometimes based on a simple discount rate. The annual simple discount rate d is the ratio of the discount D for the year to the amount S on which the discount is given.
D = s * d * t
(b) Exact time of note = July 15 to September 15 = 90 ( as it is ordinary interest)
(c) Bank discount D = 13000 * 0.07 * (90/360) = $ 227.5
(d) Proceeds that leslie smith receives P = S - SDT = 13000 - 227.5 = $ 12772.5
(e)the amount lesle smith repayes = $ 13000