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On November 1,Year 1,Noble Co.borrowed $80,000 from South Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.
-How much must Noble pay South Bank on May 1,Year 2,when the note matures?
A)$4,800
B)$80,000.
C)$89,600.
D)$84,800.

Question

Quizplus · Accepted Answer

The amount borrowed is $80,000 and the interest rate is 12%, which means that the interest expense for six months would be:

$80,000 x 12% x 6/12 = $4,800

Therefore, the total amount owed to South Bank on May 1, Year 2 would be:

$80,000 + $4,800 = $84,800

Hence, the best choice is option D.

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