Question

Max Wholesaler borrowed $11,500 on a 7%, 120-day note. After 45 days, Max paid $4,025 on the note. Thirty days later, Max paid an additional $3,450. Use ordinary interest. a. Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your answers to the nearest cent.) Total interest amount $ ___

Answer 1

To find the total interest using the U.S. Rule, we need to calculate the interest for each period and add them together. The total interest is $128.29.

Step-by-step explanation:

To find the total interest using the U.S. Rule, we need to calculate the interest for each period and add them together.

1. For the first 45 days, the interest is calculated as: $11,500 * 7% * (45/365) = $80.00
2. For the next 30 days, the interest is calculated as: $7,475 * 7% * (30/365) = $48.29

The total interest is $80.00 + $48.29 = $128.29

Answer 2

To calculate the total interest using the U.S. Rule for a 120-day note with payments made at different intervals, you need to calculate the interest for each time period and add them together.

Step-by-step explanation:

To calculate the total interest using the U.S. Rule, we need to determine the interest for each time period and add them together.

1. First period: $11,500 x 7% x 45/365 = $82.60

2. Second period: ($11,500 - $4,025) x 7% x 30/365 = $60.79

3. Third period: ($11,500 - $4,025 - $3,450) x 7% x 45/365 = $74.87

Total interest = $82.60 + $60.79 + $74.87 = $218.26