Porters Inc. issued a 120-day note in the amount of $160,000 on 12/14/12 with an annual rate of 9%. What amount of interest has accrued as of 12/31/12?

Question

Business

Roderick Nunez

16 June, 14:22

Porters Inc. issued a 120-day note in the amount of $160,000 on 12/14/12 with an annual rate of 9%. What amount of interest has accrued as of 12/31/12?

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Aleena Spencer · Answer 1

The amount of interest has accrued as of 12/31/12: $720

Explanation:

Porters Inc. issued a 120-day note in the amount of $160,000 on 12/14/12 with an annual rate of 9%.

The amount of interest Porters Inc. pays per year = $160,000 x 9% = $14,400

Assuming 1 year period to calculated interest has 360 days.

From 12/14/12 to 12/31/12, Porters Inc. had issued the note for 18 days.

The amount of interest has accrued on 12/31/12:

$14,400/360 x 18 = $720