Question
A 250-day note, signed on August 12 for $32,000, has a rate of 7% compounded annually. A payment of $12,000 was made on October 15. Find the balance owed on the principal on October 15. $31,601. 80 $398. 22 $20,398. 22 $11,601. 78
Answer
$11,601.78
- Find the interest rate per day. A: The interest rate per day would be 7%/365 = 0.01917808%.
- Calculate the interest for 64 days (August 12 - October 15) on the principal amount of $32,000 at the daily interest rate. A: Interest for 64 days would be (0.01917808% * 64) * $32,000 = $391.52.
- Subtract the payment made on October 15 from the amount calculated in Step 2. A: $391.52 - $12,000 = -$11,608.48.