Raul Fletes borrowed $10000 on a 270 -day note that required ordinary interest at 14.42 %. Raul paid $5000 on the note on the 90th day. How much interest did he save by making the partial payment?

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Business

Makena Mckee

25 September, 08:38

Raul Fletes borrowed $10000 on a 270 -day note that required ordinary interest at 14.42 %. Raul paid $5000 on the note on the 90th day. How much interest did he save by making the partial payment?

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Answers (1)

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Charlee · Answer 1

The interest expenses Raul saves by making the partial repayment on the 90th day of the note is: $360.5.

Explanation:

Assume the interest calculation is based on a 360-day-per-year basis.

By making partially repayment of $5,000 at the 90th day of the note, Raul has saved the interest expenses incurred for the $5,000 principal for the remaining 180 days of the note (calculated as 270 days - 90 days).

So, the interest expenses saving is calculated as:

5,000 x 14.42% * 180/360 = $360.5.

So, the answer is $360.5.