   Chapter 10.II, Problem 30RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

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

# Solve the following word problems. Round answers to the nearest cent when necessary.What is the maturity date of a loan for $5,000 at 15 % exact interest taken out on June 3? The amount of interest on the loan was$150.

To determine

To calculate: The maturity date of loan where loan date is 27 June, principal amount is $5,000, rate of exact interest is 15% and amount of interest is$150.

Explanation

Given Information:

Loan date is 27 June, principal amount is $5,000, rate of interest is 15% and amount of interest is$150.

Formula used:

Follow the steps for determining maturity date of a loan:

Step1. Calculate the time duration of loan.

Step2. Calculate the number of days that are left in the month loan is taken by subtracting the loan date from the number of days in the month.

Step3. Subtract the number of days remaining in the first month from the total duration of loan.

Step4. Keep on subtracting the days from consequent months until the maturity date corresponds to the difference.

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.

Calculation:

Consider that interest amount is $150, principal invested is$5,000, rate of interest is 15%.

Compute the time duration of loan by substituting $150 for amount of interest,$5,000 for principal and 0.15 for rate of interest in the formula T=IPR.

T=IPR=1505,000×0

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