Jones of Boston borrowed $40,000, on a 90-day 10% note. After 60 days, Jones made an initial payment of $6,000. On day 80, Jones made an additional payment of $7,000. Assuming the U.S. Rule, what is the adjusted balance after the second payment? Use 360 days.

Question

Quizplus · Accepted Answer

$40,000 × .10 × 60/360 = $666.67; $6,000 - $666.67 = $5,333.33; $40,000 - $5,333.33 = $34,666.67; 34,666.67 × .10 × (80 - 60)/ 360 = $192.59; 7000 - 192.59 = $6,807.41; 34,666.67 - 6,807.41 = $27,859.26.

Jones of Boston Borrowed $40,000, on a 90-Day 10% Note