107 On May 3 2014 Leven Corp negotiated a shortterm loan of

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On May 3, 2014, Leven Corp. negotiated a short-term loan of $630,000. The loan is due October 1, 2014, and carries a 5.20% interest rate. Use ordinary interest to calculate the interest.

What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

Maturity value            $

Solution

Value of Short-term Loan = $630,000
Interest Rate = 5.20%

Number of days from May 3 to October 1 = 151

Interest Expense = $630,000 * 5.20% * 151/360
Interest Expense = $13,741

Total Amount paid = Value of Short-term Loan + Interest Expense
Total Amount paid = $630,000 + $13,741
Total Amount paid = $643,741