what is the total payment required to pay off a promissory note issued for $650.00 at 10% ordinary interest…

what is the total payment required to pay off a promissory note issued for $650.00 at 10% 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 $650.00 at 10% ordinary interest and a 90 - day term? $? round to the nearest cent.

Answer

Answer:

$666.25$

Explanation:

Step1: Calculate the interest

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate, and $t$ is the time in years. The principal $P=$650$, the annual interest rate $r = 10%=0.1$, and the time $t=\frac{90}{360}=0.25$ (since ordinary interest uses 360 - day year). So, $I=Prt=650\times0.1\times0.25 = 16.25$.

Step2: Calculate the total payment

The total payment $A$ is the sum of the principal $P$ and the interest $I$. So, $A=P + I=650+16.25=$666.25$.