Asked by Dellarose Dickson on Jun 23, 2024
Verified
Interest due on a $26,000, 11%, 2.5-year note is: (Do not round any intermediate calculations. Round your final answer to the nearest dollar.)
A) $2,860.
B) $33,150.
C) $7,150.
D) $26,000.
Intermediate Calculations
Calculations performed as part of a larger problem-solving process that involve steps between the initial setup and the final solution.
2.5-Year Note
A promissory note or bond maturing in 2.5 years from the date it was issued.
- Utilize the core interest formula for determining interest applicable to promissory notes.
- Execute the correct computation method for interest over varying time frames, based on a standard 360-day year.
Verified Answer
YR
Yesenia RamirezJun 24, 2024
Final Answer :
C
Explanation :
The interest on the note can be calculated using the formula: Interest = Principal × Rate × Time. Here, Principal = $26,000, Rate = 11% or 0.11, and Time = 2.5 years. So, Interest = $26,000 × 0.11 × 2.5 = $7,150.
Learning Objectives
- Utilize the core interest formula for determining interest applicable to promissory notes.
- Execute the correct computation method for interest over varying time frames, based on a standard 360-day year.