Asked by Kayla Cohen on May 02, 2024
Verified
The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.) \bold{\text{(Use 360 days a year.) }}(Use 360 days a year.)
A) $450.00.
B) $37.50.
C) $112.50.
D) $11.25.
E) $1,800.00.
Accrued Interest
Interest that has accumulated over a period but has not yet been paid or officially recorded.
Maturity Date
The date on which a financial instrument, such as a bond or loan, is due to be repaid in full.
- Gain insight into the procedure for interest calculation on promissory notes.
Verified Answer
TH
Taylor HenryMay 07, 2024
Final Answer :
C
Explanation :
The formula for simple interest is:
Interest = Principal x Rate x Time
First, we need to convert the time to the fraction of a year. Since there are 360 days in a year, 90 days is equal to 90/360 = 1/4 of a year.
Next, we can plug in the given values:
Interest = $7,500 x 0.06 x 1/4
Interest = $281.25
Therefore, the interest accrued on $7,500 at 6% for 90 days is $281.25, which is closest to answer choice C, $112.50, after rounding to the nearest cent.
Interest = Principal x Rate x Time
First, we need to convert the time to the fraction of a year. Since there are 360 days in a year, 90 days is equal to 90/360 = 1/4 of a year.
Next, we can plug in the given values:
Interest = $7,500 x 0.06 x 1/4
Interest = $281.25
Therefore, the interest accrued on $7,500 at 6% for 90 days is $281.25, which is closest to answer choice C, $112.50, after rounding to the nearest cent.
Learning Objectives
- Gain insight into the procedure for interest calculation on promissory notes.