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maturity value/ please help

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 $

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Stephen W. | CPA with passion for teaching and helping othersCPA with passion for teaching and helpin...
5.0 5.0 (17 lesson ratings) (17)

I'm not sure what the question is referring to as "table value", but this is solved using simple interest calculation (no compounding). I have left the structure of the solution without solving the entire problem, so that you can learn the fomula, etc.

Beginning Date 5/15/2010

Ending Date 10/13/2010

Days in lending period 148
Days in year 360
Percentage of year in lending period (solve for this)

Interest calculation
  Principal amount 703,000
x Rate, annual (provided in question)
x Percentage of year (from above answer)
Product of above (interest due at maturity) (solve for this) A

Add: Principal amount due at maturity 703,000 B

Total due at maturity (solve for this) A + B


Remember: interest due = principal amount X rate (annual) X time (percentage of year that loan is outstanding). Don't forget to add back in the principal amount due at maturity, as well. 


Good luck!