If an instrument provides for interest but the amount of interest cannot be determined from the description,interest is payable at the judgment rate in effect at the place of payment of the instrument.

Question

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According to the Uniform Commercial Code (UCC) section 3-118, if an instrument provides for interest but does not specify the rate or method of calculating the interest, then interest is payable at the judgment rate in effect at the place of payment of the instrument. Therefore, the statement is true.

If an Instrument Provides for Interest but the Amount of Interest