document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1172504>Question 1172504</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Steve Perry borrowed $70,000 at 12% ordinary interest for 60 days. On day 20 of the loan, Steve made a partial payment of $8,000. What is the new maturity value (in $) of the loan? (Round your answer to two decimal places.) </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #797705 by </B><A HREF=/tutors/aboutme.mpl?userid=mahikab><B>mahikab(11)</B></A><img src=\"/images/stars/stars-06.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=mahikab><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=797705\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> This problem needs several assumptions and I am going to answer with my assumptions as appropriate.<BR>\n" );
document.write( "Given:<BR>\n" );
document.write( "Interest rate r = 12%<BR>\n" );
document.write( "Time = 1 year = 365 days<BR>\n" );
document.write( " <BR>\n" );
document.write( "Assumption 1: Partial payment of $8,000 will directly applied to Principal<BR>\n" );
document.write( "Here the interest will be calculated as below:<BR>\n" );
document.write( "a) 12% on $70,000 for 20 days<BR>\n" );
document.write( "Interest in this case = $70000 * 12/100 * 20/365 = $460.27<BR>\n" );
document.write( "b) 12% on $70,000 - $8,000 = $62,000 for remaining 60-20 = 40 days<BR>\n" );
document.write( "Interest in this case = $62000 * 12/100 * 40/365 = $815.34<BR>\n" );
document.write( "So the maturity value of this loan on 60th day is = $62,000 + $460.27 + $815.34 = $63,275.62<BR>\n" );
document.write( " <BR>\n" );
document.write( "Assumption 2: Principal will be adjusted after interest is paid off.<BR>\n" );
document.write( "So the loan amount for first 20 days = $70,000<BR>\n" );
document.write( "Interest for the 20 days = $70000 * 12/100 * 20/365 = $460.27<BR>\n" );
document.write( "Partial payment towards principal = $8,000 - $460.27 =  $7,539.73 <BR>\n" );
document.write( "Balance principal = $70000 -  $7,539.73 = $62,460.27<BR>\n" );
document.write( "Interest on this remaining principal = $62,460.27 * 12/100 * 40/365 = $821.40<BR>\n" );
document.write( "So the maturity value of this loan on 60th day is = $62,460.27 + $821.40 =  $63,281.67  </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );