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Homework answers / question archive / On October 5, Tristan Sandino borrowed $7,500 to buy an English bulldog

On October 5, Tristan Sandino borrowed $7,500 to buy an English bulldog

Finance

On October 5, Tristan Sandino borrowed $7,500 to buy an English bulldog. The loan carried a rate of 5% and Tristan agreed to pay a maximum of $315 in interest. What is the maturity date of this loan? Assume a 365-day year. Express your answer as month and day. (Example: June 8)

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Computation of Maturity Date of Loan:

Maximum Interest = P * R * T

$315 = $7,500 * 5% * T

$315 = $375*T

T = $315/$375

T = 0.84 year

Number of Days = 0.84*365 = 306.60 or 307 days 

 

So, 

Maturity Date of Loan = Borrowing Date + Number of Days 

= October 5 + 307 days 

= August 8

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