On April 18, Michelle Lizaro borrowed $4,000 from her credit union at 9% for 79 days....

On April 18, Michelle Lizaro borrowed $4,000 from her credit union at 9% for 79 days. The credit union uses the ordinary interest method. Use rounded answer in the subsequent requirements. a. What is the amount of interest on the loan? Round your answer to the nearest cent. $ b. What is the maturity value of the loan? Round your answer to the nearest cent. $ c. What is the maturity date of the loan?

Solutions

Expert Solution

Amount of interest = Principal x Rate x Time

= $ 4,000 x 0.09 x 79/360

= $ 4,000 x 0.09 x 0.21944444444444

= $ 79.00

[Ordinary interest based on 360 days year]

Maturity value of loan = Principal + Interest

= $ 4,000 + $ 79 = $ 4,079

Maturity date of loan = July 6

30 – 18 = 12 days of April may

31 days of May

30 days of June

79 – 12 – 31 – 30 = 6

jeff jeffy answered 1 year ago

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