question archive Chapter 4 Simple Interest Use: I - PRT The Mexican restaurant where Tristan works borrowed $78,000 for 90 days to purchase new kitchen equipment
Chapter 4 Simple Interest Use: I - PRT The Mexican restaurant where Tristan works borrowed $78,000 for 90 days to purchase new kitchen equipment
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Chapter 4 Simple Interest Use: I - PRT The Mexican restaurant where Tristan works borrowed $78,000 for 90 days to purchase new kitchen equipment. The rate was 11.4% using ordinary interest (360-day year). On day 34 of the loan, the restaurant made a partial payment of $5,000. What is the adjusted balance after this partial payment? Round to the nearest cent.
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Please find the solution as below
Principal amount = 78000
Rate = 11.4%
Interest for 34 days = 78000*0.114*34/360 = 839.8
Closing balance on that day = 78000+839.8 = 78839.8
Amount paid = 5000
Therefore, balance after this partial payment = 78839.8 - 5000 = $73839.8
