Principal $8,500, Interest Rate 5%, Time 240 days (use ordinary interest) Partial payments: On 100th day, $3,000; On 180th day, $2,100 a. Use the U.S. Rule to solve for total interest cost. Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent. Total interest cost b. Use the U.S. Rule to solve for balances. Note: Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest cent. Balance after the payment On 100th day c. Use the U.S. Rule to solve for final payment. On 180th day
Principal $8,500, Interest Rate 5%, Time 240 days (use ordinary interest) Partial payments: On 100th day, $3,000; On 180th day, $2,100 a. Use the U.S. Rule to solve for total interest cost. Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent. Total interest cost b. Use the U.S. Rule to solve for balances. Note: Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest cent. Balance after the payment On 100th day c. Use the U.S. Rule to solve for final payment. On 180th day
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Given
Principal $8,500, Interest Rate 5%, Time 240 days (use ordinary interest)
Partial payments: On 100th day, $3,000; On 180th day, $2,100
a. Use the U.S. Rule to solve for total interest cost.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.
Total interest cost
b. Use the U.S. Rule to solve for balances.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest cent.
Balance after the payment
On 100th day
On 180th day
c. Use the U.S. Rule to solve for final payment.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.
Transcribed Image Text:a. Use the U.S. Rule to solve for total interest cost.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.
Total interest cost
b. Use the U.S. Rule to solve for balances.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answers to the nearest cent.
Balance after the payment
On 100th day
Final payment
On 180th day
c. Use the U.S. Rule to solve for final payment.
Note: Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.
5001 T 200
Expert Solution
Step 1
As per the U.S. Rule, the unpaid principal value is used for calculating interest and no interest compounding happens.
In simple words, we use the simple interest technique for the calculation of the interest amount.
Also, the interest is not calculated till the time any payment is received.
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