I'm an older student; please check my answer to the following problem.
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You are the owner of five DB Auto Lube locations. You have a business loan with KBK taken out 60 days ago, and due in 90 days. The amount of the loan is Php 192 million, and the rate is 10.5%, using ordinary interest.
You currently have some excess cash. You have the choice of sending KBK Php 120 million now as partial payment on your loan or purchasing Php 120 million of motor oil and filters for your inventory at a special discount price that is "10% off" your normal cost of these items.
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question: How much interest will you save on this loan if you make the partial payment and don't buy the merchandise?
equation of ordinary interest: I = Pr(t/360)
my given: P (for principal) = Php 192 M; r (for rate) = 10.5%; t (for time) = 60 (days ago) + (due in) 90 (days) = 150 days;
Partial payment is Php 120 M.
my solution: (Php 192 M - Php 120 M) 0.105 (150/360)
my answer: Php 3.15 M
__________________________
You are the owner of five DB Auto Lube locations. You have a business loan with KBK taken out 60 days ago, and due in 90 days. The amount of the loan is Php 192 million, and the rate is 10.5%, using ordinary interest.
You currently have some excess cash. You have the choice of sending KBK Php 120 million now as partial payment on your loan or purchasing Php 120 million of motor oil and filters for your inventory at a special discount price that is "10% off" your normal cost of these items.
__________________________
question: How much interest will you save on this loan if you make the partial payment and don't buy the merchandise?
equation of ordinary interest: I = Pr(t/360)
my given: P (for principal) = Php 192 M; r (for rate) = 10.5%; t (for time) = 60 (days ago) + (due in) 90 (days) = 150 days;
Partial payment is Php 120 M.
my solution: (Php 192 M - Php 120 M) 0.105 (150/360)
my answer: Php 3.15 M