A few days ago
Hi…can you tell me if I’m doing this finance problem right?
Q) A company borrowed $500,000 at a rate of 10% simple interest, with monthly interest payments. Based on a 365-day year, what would the required interest payment be for a 30-day month?
A) I have 500,000 * .10 = 50,000/365 = 136.99 * 30 = $4,109.59.
Top 3 Answers
A few days ago
Favorite Answer
I would calculate it at $4,500 a month. The question didn’t state it was based on daily interest but rather simple interest with interest only payments. Thus 10% of $500,000 is $50,000 divided by 12 months =’s $4,500 per month.
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A few days ago
Your equation is correct for a 30 day month.
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A few days ago
Correct. Well done.
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