Asked by Sheri Walton on May 31, 2024
Verified
Interest due on a $21,000, 11%, 10-month note is: (Do not round any intermediate calculations. Round your final answer to the nearest dollar.)
A) $1,925
B) $2,310
C) $22,925
D) $21,000
Intermediate Calculations
The computations performed as steps towards the final calculation or analysis of data, often part of a larger mathematical, financial, or statistical process.
10-Month Note
A debt instrument or promissory note that becomes due for payment 10 months after it is issued.
- Estimate interest on promissory notes by deploying the basic interest formula.
- Use the correct formula to calculate interest for multiple periods, adhering to a standard 360-day year framework.
Verified Answer
JM
Jasmyne McGeeJun 01, 2024
Final Answer :
A
Explanation :
The interest on the note can be calculated using the formula: Interest = Principal × Rate × Time. Here, Principal = $21,000, Rate = 11% (or 0.11 when expressed as a decimal), and Time = 10/12 year (since it's for 10 months). So, Interest = $21,000 × 0.11 × 10/12 = $1,925 (rounded to the nearest dollar).
Learning Objectives
- Estimate interest on promissory notes by deploying the basic interest formula.
- Use the correct formula to calculate interest for multiple periods, adhering to a standard 360-day year framework.