lisa borrowed $8000.00 on an 8%, 60 day note after 15 days she paid $2000.00 on the note , on day 45 , she paid $1000.00 on the note. What is the total interest and ending balance due by us rule by ordinary interest
To calculate the interest and ending balance due using the US Rule by ordinary interest, we need to follow these steps:
Step 1: Calculate the interest for the first period:
Interest = Principal * Rate * Time
Principal = $8000
Rate = 8% or 0.08
Time = 15 days / 360
Note: We use 360 days to represent a year in the US Rule.
Interest (First period) = $8000 * 0.08 * (15/360)
Step 2: Calculate the remaining principal after the first payment:
Remaining principal after the first payment = Principal - First payment
First payment = $2000
Remaining principal after the first payment = $8000 - $2000
Step 3: Calculate the interest for the second period using the remaining principal:
Interest (Second period) = Remaining principal after the first payment * Rate * Time
Time = (45 - 15) days / 360
Step 4: Calculate the remaining principal after the second payment:
Remaining principal after the second payment = Remaining principal after the first payment - Second payment
Second payment = $1000
Step 5: Calculate the total interest:
Total interest = Interest (First period) + Interest (Second period)
Step 6: Calculate the ending balance due:
Ending balance due = Remaining principal after the second payment + Total interest
Let's calculate the values now:
Step 1: Calculate the interest for the first period:
Interest (First period) = $8000 * 0.08 * (15/360) = $26.67
Step 2: Calculate the remaining principal after the first payment:
Remaining principal after the first payment = $8000 - $2000 = $6000
Step 3: Calculate the interest for the second period:
Time = (45 - 15) / 360 = 30 / 360 = 1/12
Interest (Second period) = $6000 * 0.08 * (1/12) = $40.00
Step 4: Calculate the remaining principal after the second payment:
Remaining principal after the second payment = $6000 - $1000 = $5000
Step 5: Calculate the total interest:
Total interest = $26.67 + $40.00 = $66.67
Step 6: Calculate the ending balance due:
Ending balance due = $5000 + $66.67 = $5066.67
Therefore, the total interest is $66.67 and the ending balance due by the US Rule by ordinary interest is $5066.67.
To find the total interest and ending balance due by US rule for ordinary interest, let's break down the steps:
1. Calculate the interest for the 60-day period:
Interest = Principal x Rate x Time
Principal = $8000.00
Rate = 8% (or 0.08 as a decimal)
Time = 60 days
Interest = $8000.00 x 0.08 x (60/365) [Note: Dividing by 365 converts days to a fraction of a year]
Interest = $878.90 (rounded to the nearest cent)
2. Calculate the interest paid after 15 days:
Interest = Principal x Rate x Time
Principal = $8000.00
Rate = 8% (or 0.08 as a decimal)
Time = 15 days
Interest = $8000.00 x 0.08 x (15/365)
Interest = $263.01 (rounded to the nearest cent)
3. Calculate the interest paid after 45 days:
Interest = Principal x Rate x Time
Principal = $8000.00
Rate = 8% (or 0.08 as a decimal)
Time = 45 days
Interest = $8000.00 x 0.08 x (45/365)
Interest = $527.40 (rounded to the nearest cent)
4. Calculate the remaining balance after the two payments:
Remaining Balance = Principal - Payment1 - Payment2
Principal = $8000.00
Payment1 = $2000.00
Payment2 = $1000.00
Remaining Balance = $8000.00 - $2000.00 - $1000.00
Remaining Balance = $5000.00
5. Add the interest from step 2 and step 3 to the remaining balance:
Total Interest = Interest1 + Interest2
Total Interest = $263.01 + $527.40
Total Interest = $790.41 (rounded to the nearest cent)
Ending Balance = Remaining Balance + Total Interest
Ending Balance = $5000.00 + $790.41
Ending Balance = $5790.41 (rounded to the nearest cent)
Therefore, the total interest is $790.41 and the ending balance due by US rule for ordinary interest is $5790.41.