Chapter 10, Problem 17AT

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Calculate the missing information for the following loans. Round percents to the nearest tenth and days to the next higher day when necessary. 17. $13,000 14 Ordinary$960

To determine

To calculate: The time period of the loan (in days) and maturity value where the principal invested is $13,000, the ordinary rate of interest is 14% and interest amount is$960. Round the figure to next higher day if required.

Explanation

Given Information:

Principal invested is $13,000, the rate of interest is 14% and interest amount is$960.

Formula used:

The formula to compute the time period of the loan (in days) is,

T=IPR×360

Where P is the principal amount, I is the amount of interest, R is the rate of interest, T is the time period.

Multiply T by 360 to convert years into months.

The formula to calculate Maturity value is,

MV=P+I

Where, MV is Maturity value, P is the Principal Amount, I is the amount of interest.

Calculation:

Consider that interest amount is $960, principal invested is$13,000, the rate of interest is 14%.

Simplify the rate of interest as

14%=14100=0.14

Substitute $960 for the amount of interest,$13,000 for principal and 0.14 for the rate of interest in the formula T=IPR×360 to compute the time period (in days)

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