A 180-day note was signed on June 11 for $24,700. The note has a rate of 9.5%, compounded annually. A...

Question

26. A 180-day note was signed on June 11 for $24,700. The note has a rate of 9.5%, compounded annually. A payment of $6,000 was made on July 2. Calculate the new balance owed on the principal on July 2. Use the banker's method which uses a 360-day year.

SnapAndSolve AI · Accepted Answer

To calculate the new balance owed on July 2, we first need to determine the interest accrued from June 11 to July 2.

Calculate the number of days between June 11 and July 2: 21 days.
Calculate the interest for 21 days using the formula: Interest = Principal × Rate × Time, where Time is in years.
Principal = $24,700, Rate = 9.5% per annum, Time = 21/360 years.
Interest = $24,700 × 0.095 × (21/360) = $136.88 (approximately).
Add the interest to the principal: $24,700 + $136.88 = $24,836.88.
Subtract the payment made on July 2: $24,836.88 - $6,000 = $18,836.88.

The new balance owed on the principal on July 2 is $18,836.88.

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A 180-day note was signed on June 11 for $24,700. The note has a rate of 9.5%, compounded annually. A...

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