Chapter 10.II, Problem 26RE

### 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.Principal Rate (%) Time (days) Interest Method Interest Maturity Value___________________________________________________________________________________ 10.4 ____ Exact $4,000$59,000

To determine

To calculate: The principal amount and time period of loan in days using the exact interest method where rate of interest is 10.4%, interest amount is $4,000 and maturity value is$59,000. Round the percent to nearest tenth and days to next higher day if required.

Explanation

Given Information:

Rate of interest is 10.4%, interest amount is $4,000 and maturity value is$59,000.

Formula used:

The formula to compute principal amount is,

P=MVI

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

The formula to compute the time period of loan using the exact interest method is,

T=IPR

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

Multiply T by 365 to compute the time period of loan in days.

Calculation:

Consider that interest amount is $4,000 and maturity value is$59,000.

Compute the principal amount by substituting $4,000 for interest amount and$59,000 for maturity value in the formula P=MVI:

P=MVI=$59,000$4,000=$55,000 Hence, principal amount is$55,000

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