May. 10, 2010, Leven Corp. negotiated a short-term loan of $705,000. The loan is due Oct. 2, 2010, and carries a 7.06% interest rate. Use ordinary interest to calculate the interest.


What is the total amount Leven would pay on the maturity date?(Use table value.) (Use 360 days a year. Do not round intermediate calculations. Round your answer to two decimal places. Omit the "$" sign in your response.)

Maturity value $ 725,047.45

Explanation:
Due date of loan Oct. 2 = 275 day of year
Date of loan May. 10 = - 130 day of year
__________________
145 days on loan (time)
__________________
P R T
$705,000 × 0.0706 × 145/360 =$20,047.46
Interest
$ 705,000.00 P
+20,047.46 I
____________________
$ 725,047.46

To calculate the interest on a short-term loan using ordinary interest, you can use the formula:

Interest = Principal * Rate * Time

In this case, the principal (loan amount) is $705,000, the interest rate is 7.06%, and the time period is the number of days between May 10 and October 2.

To find the number of days, we can subtract the starting date from the ending date.

May 10 to October 2 is 145 days (including both the start and end dates).

Now, we can calculate the interest:

Interest = $705,000 * 0.0706 * (145/360)

Let's break down the calculation:

Step 1: Multiply the principal by the interest rate:
$705,000 * 0.0706 = $49,683

Step 2: Divide the number of days by 360 (since we are assuming the year has 360 days):
145/360 ≈ 0.4028

Step 3: Multiply the result from step 2 by the result from step 1:
$49,683 * 0.4028 = $20,028.47

Rounding to two decimal places, the interest on the loan is approximately $20,028.47.

To find the total amount Leven would pay on the maturity date, you need to add the interest to the original loan amount:

Total amount = Principal + Interest
Total amount = $705,000 + $20,028.47 = $725,028.47

Therefore, the total amount Leven would pay on the maturity date is approximately $725,028.47.