Question

A loan of $1,000 is due in 1 year with simple interest at 14 ½% per annum. The debtor pays $200 in 3 months and $400 in 7 months. Find the balance due in 1 year to repay the loan.

Answer 1

P = Po + Po*r*t = 1,000 + 1000*0.145*1 = $1,145,
1145 - (200 + 400) = $545 = Bal. due in 1 yr.