On march 1, 2018, mandy services issued a 3% long-term notes payable for $15,000. it is payable over a 3-year term in $5,000 principal installments on march 1 of each year, beginning march 1, 2019. each yearly installment will include both principal repayment of $5,000 and interest payment for the preceding one-year period. what is the amount of total cash payment that mandy will make on march 1, 2019?

Mandy will make total cash payment of on March 1, 2019.

Further explanation:

Mandy issued a 3% long-term notes payable for over a 3-year term in principal installments on March 1 each year.

Then the interest payment for the first year will apply on total amount of .

The formula for simple interest at principal value and rate percentage of in the time of years is,

So, the interest amount payable at the end of one year is calculated as,

The total cash payment to be done by Mandy after a year on March 1, 2019, is the sum of the principal installment of and the interest applied on the total amount.

Hence the total cash payment is obtained as,

Therefore, Mandy has to make a total payment of on March 1, 2019.

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Answer details  

Grade: High school  

Subject: Mathematics  

Chapter: Simple Interest

Keywords: installments, one year, Mandy, principal, long-term, payable, March 1, amount, total cash, total cash payments, each year, payments, simple interest, rate percentage, sum, total amount, time, interest applied.

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