what is the total payment required to pay off a promissory note issued for $700.00 at 15% ordinary interest…

what is the total payment required to pay off a promissory note issued for $700.00 at 15% ordinary interest and a 90 - day term? $? round to the nearest cent.

what is the total payment required to pay off a promissory note issued for $700.00 at 15% ordinary interest and a 90 - day term? $? round to the nearest cent.

Answer

Answer:

$726.25

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. $P=$700$, $r = 0.15$, and $t=\frac{90}{360}=0.25$ (since ordinary interest uses 360 - day year). $I=700\times0.15\times0.25$ $I = 700\times0.0375=$26.25$

Step2: Calculate the total payment

The total payment $A$ is the sum of the principal $P$ and the interest $I$. $A=P + I$ $A=700+26.25=$726.25$