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Restaurant Loan.  The Sweet Tooth Restaurant borrowed \$3000 on a note dated May 15 with simple interest of 11%.  The maturity date of the loan is September 1.  The restaurant made partial payments of \$875 on June 15 and \$940 on August 1.  Find the amount due on the maturity date of the loan.

May 26th, 2015

Amount Borrowed = \$3000 On 15 May

Partial payment \$875 on  15 June (after one month)  : Interest accumulated in 1 month = 3000 * 11*1/1200 = \$27.5

hence amount due on 15 June = 3000+27.5-875 =\$ 2152.5

Again he made Partial payment \$940  on  1 August (after 1.5 month)  : therefore Interest accumulated in 1.5 month =2152.5 * 11*1.5/1200 = \$29.60

hence amount due on 1 August = \$ 2152.5+29.6-940= \$1242.10

Maturtiy date is 1 Sep ( 1 month still there from 1 August)

Hence Interest accumulated in 1 month = 1242.1 * 11*1/1200 = \$11.39

hence amount due on maturity  = \$1242.1+11.39 = \$1253.49     or  \$1253.50   (Answer)

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May 26th, 2015

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May 26th, 2015
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May 26th, 2015
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