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6.1 Introduction to Lending

6.1 Introduction to Lending
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  • 1. Promissory Notes

    Find (a) the term of the loan and (b) the total amount due. (See Example 1.)

    • Worked-Out Solution
      1. The term of the loan is 2 years.
      2. The total amount due is $1900.
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      ______    _____              _    _     ______  
     /_   _//  |  ___||   ____    | || | ||  /_____// 
     `-| |,-   | ||__    |    \\  | || | ||  `____ `  
       | ||    | ||__    | [] ||  | \\_/ ||  /___//   
       |_||    |_____||  |  __//   \____//   `__ `    
       `-`'    `-----`   |_|`-`     `---`    /_//     
                         `-`                 `-`      
    
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  • 2. Promissory Notes

    Find (a) the term of the loan and (b) the total amount due. (See Example 1.)

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     _____     __   __    _____      ___      ______  
    |  __ \\   \ \\/ //  /  ___||   / _ \\   /_   _// 
    | |  \ ||   \ ` //  | // __    / //\ \\    | ||   
    | |__/ ||    | ||   | \\_\ || |  ___  ||  _| ||   
    |_____//     |_||    \____//  |_||  |_|| /__//    
     -----`      `-`'     `---`   `-`   `-`  `--`     
                                                      
    
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  • 3. Due Date

    When is the note shown below due. (See Example 2.)

    • Worked-Out Solution

      The note was signed on March 1, 2012. It is due in 90 days.

      So, the note is due on May 30, 2012.

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     _    _    __   __   __   _      ___      _  _   
    | || | ||  \ \\/ // | || | ||   / _ \\   | \| || 
    | || | ||   \ ` //  | '--' ||  / //\ \\  |  ' || 
    | \\_/ ||    | ||   | .--. || |  ___  || | .  || 
     \____//     |_||   |_|| |_|| |_||  |_|| |_|\_|| 
      `---`      `-`'   `-`  `-`  `-`   `-`  `-` -`  
                                                     
    
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  • 4. Due Date

    On April 19, you obtain a 60-day note for $5000. The costs include $81.37 for interest and a $50.99 service charge. When is the note due? How much is due at the end of 60 days? (See Example 2.)

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     __   _      ___      _  _    _    _     ____    
    | || | ||   / _ \\   | \| || | || | ||  |  _ \\  
    | '--' ||  / //\ \\  |  ' || | || | ||  | |_| || 
    | .--. || |  ___  || | .  || | \\_/ ||  | .  //  
    |_|| |_|| |_||  |_|| |_|\_||  \____//   |_|\_\\  
    `-`  `-`  `-`   `-`  `-` -`    `---`    `-` --`  
                                                     
    
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  • 5. Due Date

    You obtain a 120-day note for $20,000 to use as a down payment on a home. The loan takes place on January 19. The costs include $789.04 for interest and $134 in other charges. When is the note due? How much is due at the end of 120 days? (See Example 2.)

    • Worked-Out Solution

      The note was signed on January 19, 2012. It is due in 120 days.

      So, the note is due on May 18, 2012.

      At that time the total amount due is

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       _____     ___      ____      ______    _____   
      / ___//   / _ \\   |  _ \\   /_   _//  / ____|| 
      \___ \\  / //\ \\  | |_| ||   -| ||-  / //---`' 
      /    // |  ___  || | .  //    _| ||_  \ \\___   
     /____//  |_||  |_|| |_|\_\\   /_____//  \_____|| 
    `-----`   `-`   `-`  `-` --`   `-----`    `----`  
                                                      
    
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  • 6. Leap Year

    On January 19, 2013, you obtain a 120-day note. Is the due date on the same day of the year as in Exercise 5? Explain. (See Example 2.)

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      ______   __   __    ____     _    _     ____    
     /_   _//  \ \\/ //  |  _ \\  | || | ||  |  _ \\  
     `-| |,-    \ ` //   | |_| || | || | ||  | |_| || 
       | ||      | ||    | .  //  | \\_/ ||  | .  //  
       |_||      |_||    |_|\_\\   \____//   |_|\_\\  
       `-`'      `-`'    `-` --`    `---`    `-` --`  
                                                      
    
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