Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:

a. $90,450

b. $90,000

c. $90,900

d. $91,800

Question

Business

Jenny Donaldson

4 March, 19:11

Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:

a. $90,450

b. $90,000

c. $90,900

d. $91,800

+4

Answers (1)

Know the Answer?

Melissa Best · Answer 1

The correct answer is C

Explanation:

The total liability for the loan is computed as:

Total liability of the loan = Loan amount + Loan amount * Rate * 1 month / Number of months

where

Loan amount is $90,000

Rate is 12%

Putting the values above:

Total liability of loan = $90,000 + $90,000 * 12% 1 / 12

Total liability of loan = $90,000 + $900

Total liability of loan = $90,900

Therefore, the aggregate liability for the loan amounts to $90,900

Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:a. $90,450b. $90,000c. $90,900d. $91,800

Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:

a. $90,450

b. $90,000

c. $90,900

d. $91,800