Problema Solution
Euromart Tile Company borrowed $40,000 on April 6 for 66 days. The rate was 14% using the ordinary interest rate method. On day 25 of the loan, Euromart made a partial payment of $15,000, and on day 45 of the loan, Euromart made a second partial payment of $10,000. What was the new maturity value of the loan?
Answer provided by our tutors
Interest on first 25 Days = (40,000*14%*25/365) = $ 383.56
Total interest plus Principal after 25 Days = (40000+ 383.56 - 15000) = $25383.56
Interest on second 20 days = ( 25383.56 * 14% *20/365) = $ 194.72
Total interest plus Principal after 45 Days = (25383.56+ 194.72 - 10000) = $15578.28
New maturity Value = 15578.28 + (15578.28 *14%*21/ 365) = $15703.76