You decide to take out an ordinary interest loan of $30,000 at 4%, on a 90 day note.
a.) In 45 days you decide to make a payment of $10,000 on the loan. What is your new principal? Explain how you got the answer.
b.)How much did you pay at the end of the loan overall? How does this differ from how much you would have paid overall had you not made a payment of $10,000 after 45 days?
Find the bank discount and proceeds using ordinary interest on an unsecured promissory note made to Leslie Smith for $12,000 at 7% annual simple interest from June 15 to September 15 for this year. Use the steps below to find your answers.
Explain the difference between a simple interest note and a simple discount note.
Exact time (days) of note: __________
What is the bank discount?
What are the proceeds that Leslie Smith receives?
What is the amount Leslie Smith repays?