what is the total payment required to pay off a promissory note issued for $500.00 at 10% ordinary interest…

what is the total payment required to pay off a promissory note issued for $500.00 at 10% ordinary interest and a 180 - day term? $? round to the nearest cent.

what is the total payment required to pay off a promissory note issued for $500.00 at 10% ordinary interest and a 180 - day term? $? round to the nearest cent.

Answer

Explanation:

Step1: Calculate the interest

The formula for simple - interest is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. The principal $P=$500$, the annual interest rate $r = 0.10$, and the time $t=\frac{180}{360}$ (since for ordinary interest, we assume 360 days in a year). $I=Prt=500\times0.10\times\frac{180}{360}$ $I = 500\times0.10\times0.5=$25$

Step2: Calculate the total payment

The total payment $A$ to pay off the promissory note is the sum of the principal $P$ and the interest $I$. $A=P + I$ $A=500 + 25=$525.00$

Answer:

$525.00$