Posted by Kim on Monday, March 10, 2008 at 12:27pm.
Which specific part of this assignment do you need help with? Please tell us your thinking and figures on this and we'll try to help you.
I am sorry I did not paste the full question. Here it is. I need help in all as I am not able to understand this
Thanks
Use the United States Rule and/or Banker’s Rule to determine the balance due on the note at the date of maturity. (The effective date is the date the note was written.)
Principal - 6000
Rate - 5%
Effective Date - May 15
Maturity Date - November 1
Partial Payment Amount - $1500
Partial Payment Date -August 15
Also Answer the following questions:
1. NUMBER OF DAYS BETWEEN EFFECTIVE DATE AND PARTIAL PAYMENT =
2. INTEREST ON PARTIAL PAYMENT DATE = PRINCIPAL X RATE X (NO. OF DAYS IN #1)/360 =
3. PRINCIPAL PAID ON PARTIAL PAYMENT DATE = PARTIAL PAYMENT - INTEREST PAID =
4.NEW PRINCIPAL = ORIGINAL PRINCIPAL - AMOUNT PAID IN #3 =
5.NUMBER OF DAYS BETWEEN PARTIAL PAYMENT DATE AND MATURITY DATE =
6. INTEREST IN MATURITY DATE = NEW PRINCIPAL X RATE X (NO. OF DAYS IN #5) /360 =
7. BALANCE DUE ON MATURITY DATE = NEW BALANCE + INTEREST ON MATURITY DATE =
1. Days between effective date and partial payment?
How many days are there between May 15 and August 15?
2. Interest on partial payment date?
3. Principal paid?
You have the formulas. Just plug in the numbers.
This gives you a start. We'll be glad to check your answers.
Can you please check the answer
1. 91 Days(I didn't include May 15 and August 15, Is this correct)
2. 6000*0.05*91/360 = 75.83
3. 1500 - 75.83 = 1424.17
4. 6000- 1424.17 = 4575.83
5. 77 days (again didn't include Aug15 Nov 1)
6. 4575.83*0.05*77/360 = 48.93
7. 4575.83+48.93 = 4624.76
Yes. Your answers are all correct. :-)