what is the total payment required to pay off a promissory note issued for $400.00 at 12% ordinary interest…

what is the total payment required to pay off a promissory note issued for $400.00 at 12% 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 $400.00 at 12% ordinary interest and a 90 - day term? $? round to the nearest cent.

Answer

Explanation:

Step1: Calculate the interest

The simple - interest formula 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=$400$, the annual interest rate $r = 0.12$, and the time $t=\frac{90}{360}$ (since ordinary interest uses 360 - day year). $I=Prt=400\times0.12\times\frac{90}{360}$ $I = 400\times0.12\times0.25$ $I = 12$

Step2: Calculate the total payment

The total payment $A$ is the sum of the principal $P$ and the interest $I$. $A=P + I$ $A=400+12$ $A = 412$

Answer:

$412.00$