Question

Before beginning this problem you may want to review the example on the U.S. Rule on M6.9.  

James Co. borrowed $1,200 on a 90-day, 11% loan. After 15 days, James paid $200 toward the loan. James made an additional payment of $150, 40 days later. Determine the numbers to answer the questions in the table. Use ordinary interest.

1.	Adjusted Balance (after 15 days)
2.	Adjusted Balance (after 40 additional days)
3.	Final Balance (at day 90)
4.	Total Interest Payment

Answer 1

Total Amount of loan	$ 1,200.00
interest rate		11%
Loan period		90 days
Assume one year 365 days
1	Payment of $ 200 after 15 days
	Total loan		$ 1,200.00
Add:	Interest for 15 days 1200*11/100*15/365	$         5.42
	Balance		$ 1,205.42
Less:	Payment of $200	$     200.00
	Balance after 15 days	$ 1,005.42
2	payment after 40 days $150
	Balance after 15 days	$ 1,005.42
Add:	interest for next 40days $1005.42*11/100*40/365	$       12.12
	Balance		$ 1,017.54
Less:	payment of 150	$     150.00
	Balance after 40 days	$     867.54
3	Final Balance payable after 90days
	Balance after 15+40 days	$     867.54
Add:	Interest for balance 35 days $867.54*11/100*35/365	$         9.15
	Balance payable after 90 days	$     876.69
4	Total interest
	interest for 15 days	$         5.42
	interest for 40 days	$       12.12
	interest for 35 days	$         9.15
			$       26.70