simple interest statistics

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Andres Michael bought a new boat. He took out a loan for $24,400 at 3.75% interest for 2 years. He made a $4000 partial payment at 2 months and another partial payment of $2950 at 6 months. How much is due at maturity? (Do not round intermediate calc

Nov 22nd, 2014

First let find the Amount at 2 months.

SI = PRT/100 = (24400*3.75*1/6)/100 = 152.5 (Please note here T=2 months = 2/12 years = 1/6 years)

so, Amount = SI + principle = 152.5 + 24000 = $24152.5

After the 1st partial payment , Principle = 24152.5-4000 = $20152.5

Now, SI at 6th Month, i.e. after 4 months = (20152.5*3.75*1/3)/100 = 251.91 (here T= 4/12 years = 1/3 years)

so, Amount after 6th month, = $20152.5+251.91 = $ 20404.41
so, after the 2nd partial payment = 20404.41-2950 = $17454.41

So at time of maturity, i.e. after 2 and 1/2 years,
SI = (17454.41*3.75*2.5)/100 = $1636.35

so, the amount at maturity = 1636.35+17454.41 = $19090.76

Please best the answer if helpful. Thanks :)

Nov 22nd, 2014

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