A $10,000, 5% note is dated July 6 and is due in 120 days. Using a 360-day year, the interest payment would be: (Do not round any intermediate calculations. Round your final answer to the nearest dollar.)
A) $250.
B) $500.
C) $333.
D) $167.

Question

Quizplus · Accepted Answer

The interest payment can be calculated using the formula: Interest = Principal × Rate × Time. Here, Principal = $10,000, Rate = 5% (or 0.05 as a decimal), and Time = 120/360 (since a 360-day year is used). So, Interest = $10,000 × 0.05 × (120/360) = $166.67, which rounds to $167.

A $10,000, 5% Note Is Dated July 6 and Is