maturity value/ please help.........

Question

May. 15, 2010, Leven Corp. negotiated a short-term loan of $703,000. The loan is due Oct. 13, 2010, and carries a 7.04% 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 $

10/20/2012 | Jackie from Saint Louis, MO | 2 Answers | 0 Votes

Answer 1

I assume that the calendar is 30/360. The term of the loan is 148 days, in that calendar, or 148/360 years.

Interest is Principal times rate times time=703000×.0704×148/360=20346.3822..
The total payment due at the loan maturity is 703000+20346.38=723346.28

Answer 2

First calculate the interest.

The simple interest formula is Interest=PrincipalxRatexTime or I=PRT

Count the number of days from May 15-October 13.

Then divide that by 365 to get the time.

So you end up with I=703000x.0704x(151/360)

Then add your answer to the original loan amount and then round that answer to get the total amount.