You decide to take out an ordinary interest loan of $8,375 at 7.4%, on a 90-day note.
a) In 45 days, you decide to make a payment of $4,375 on the loan. What is your new principal? Explain how you got the answer.
b) How much did you pay at the end of the loan, overall? How does this differ from how much you would have paid, overall, had you not made a payment of $4,375 after 45 days?