Question

May. 10, 2010, Leven Corp. negotiated a short-term loan of $705,000. The loan is due Oct. 2, 2010, and carries a 7.06% 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.)

Answer 1

Maturity value $ 725,047.45
Explanation:
Due date of loan Oct. 2 = 275 day of year
Date of loan May. 10 = - 130 day of year
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145 days on loan (time)
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P R T
$705,000 × 0.0706 × 145/360 =$20,047.46
Interest
$ 705,000.00 P
+20,047.46 I
____________________
$ 725,047.46