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8. The annual interest rate is 22%. The balance after the grace period was $30,000. A

payment of $1,000 was made on the 6th day. Another payment of $1,000 was made on the

21st day. What is the interest for the month?

Answer :

jepessoa

Answer:

$524.32

Step-by-step explanation:

in order to calculate this we must use calculate daily interest:

interest portion of first payment = (5 days / 365) x 0.22 x $30,000 = $90.41

principal = $30,000 - ($1,000 - $90.41) = $29,090.41

the interest portion of second payment = (15 days / 365) x 0.22 x $29,090.41 = $263.01

principal = $29,090.41 - ($1,000 - $263.01) = $28,353.42

the interest for the remaining part of the month (assuming a 30 day month) =  (10 days / 365) x 0.22 x $28,353.42 = $170.90

total interest charge for the month = $90.41 + $263.01 + $170.90 = $524.32

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