Question

The Laplace lending company loaned $2,000 to one of its clients for 3 months at a...

The Laplace lending company loaned $2,000 to one of its clients for 3 months at a 12% interest rate. One month before the loan matures they sold the loan to a private investor who discounted the loan at 9.6%. How much did Laplace earn on this transaction? ( This will be the difference between the amount loaned and the amount received by Laplace when they sold the note. Use M=P(1+rt) and p=M(1-dt).
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Answer #1

The amount due to the Laplace lending company, after 2 months, including interest on $ 2000 for 2 months at 12 % is 2000(1+2*12/1200) = $ 2040. There was 1 more month left before the loan became due. The interest for 1 month on $ 2000 is $ 2000*1/12*12/100 = $20. The amount received by the Laplace lending company towards interest,after selling the loan to a private investor is $ 20(1- 9.6/1200) = $ 19.84. Thus,the total amount received by the Laplace lending company is $ 2040+19.84=$ 2039.84 . Hence, Laplace earned $ 2039.84- $ 2000 = $ 39.84 on this transaction.

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