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: $8200
Interest: 10.5%
Time (days): 220
Partial payment: $3000 on day 150

Question

Quizplus · Accepted Answer

Using the United States Rule, the interest on the note is calculated as follows:
8200 x 0.105 = 861
The interest on the note from day 1 to day 149 is:
8200 x 0.105 x (149/360) = 349.12
The interest on the note from day 150 to day 220 is:
(8200 - 3000) x 0.105 x (70/360) = 122.12
The total interest paid on the note is:
349.12 + 122.12 = 471.24
The balance due on the maturity date of the note is:
8200 - 3000 - 5672.24 = -472.24 (this means that $472.24 is owed to the borrower)

Therefore, the best choice is B, as it provides the correct balance due and the correct amount of interest paid.

Find the Balance Due on the Maturity Date of the Note