Sherman Air Charter signed a four-month note payable in the amount of $12,000 on September 1. The note requires interest at an annual rate of 6%. The amount of interest to be accrued at the end of September is
A) $240.
B) $60.
C) $720.
D) $180.

Question

Quizplus · Accepted Answer

The first month's interest can be calculated using the formula: 
Interest = Principal x Rate x Time 
Time is 1/12 of a year (since it's just one month).

Interest = $12,000 x 0.06 x (1/12) 
Interest = $60

Sherman Air Charter Signed a Four-Month Note Payable in the Amount