Find the balance due on the maturity date of the note. Find the total amount of interest paid on the note. Use the United States Rule.
-Principal: $32,148
Interest: 11%
Time (days): 220

Question

Quizplus · Accepted Answer

To find the interest: 
Interest = (Principal x Rate x Time)/365
Interest = (32148 x 0.11 x 220)/365
Interest = 2156.88
Total Amount Due on Maturity Date = Principal + Interest
Total Amount Due on Maturity Date = 32148 + 2156.88
Total Amount Due on Maturity Date = 34304.88
Therefore, the balance due on the maturity date of the note is $13,834.60 and the total amount of interest paid on the note is $1686.60. Hence, option B is correct. Using the United States Rule, the interest for the first 30 days is calculated as follows:

$32,148 x 0.11 x 30/365 = $886.93

For the remaining 190 days, the interest is calculated as:

($32,148 + $886.93) x 0.11 x 190/365 = $8001.67

Thus, the total interest paid on the note is $886.93 + $8001.67 = $8888.60.

The balance due on the maturity date of the note is the sum of the principal and the total interest paid:

$32,148 + $8888.60 = $40,036.60.

Therefore, the best choice is B, as it matches the calculated values.

Find the Balance Due on the Maturity Date of the Note