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Question:Question 9: (10 Points)

You decide to take out a loan for $6,000, at 7% yearly interest on the date October 14. If you repay the loan on December 31st (at the end of the current year).

a)   Exact time (days) of loan: __________

b)   Using ordinary interest, calculate the interest and total owed.

c)   Using exact interest, calculate the interest and total owed. 

Question 10: (10 Points)

You decide to take out an ordinary interest loan of $35,000 at 4%, on a 90 day note.

a)   After 45 days of accruing interest, you make a payment of $15,000 on the loan. What is your new principal? Explain how you got the answer. 

b)   How much in total did you pay at the end of the loan, assuming you made that 45th day payment? How does this differ from how much you would have paid overall had you not made a payment of $15,000 after 45 days? 

Question 11: (10 Points)

Find the bank discount and proceeds using ordinary interest on a promissory note made to Leslie Smith for $13,000 at 7% annual simple interest from July 15 to September 15 for this year. Use the steps below to find your answers.

a)   Observe this situation describes a simple discount note. Explain the difference between a simple interest note and a simple discount note.

b)   Exact time (days) of note: __________

c)   What is the bank discount?

d)   What are the proceeds that Leslie Smith receives?

e)  What is the amount Leslie Smith repays?

QUESTION 1Loan amountInterest ratePeriod(years)Amount paid back QUESTION 4430008.30%0.50$44,784.50 QUESTION 2InterestInterest ratePeriod(years)Loan Amount. Interest rate Interest…