Melon Industries issues a $20,000, 10%, 135-day note to Apple Communications. Interest on the note is _________ and the maturity value is __________. (Use a 360-day year. Do not round any intermediate calculations. Round your final answers to the nearest dollar.)
A) $2,000; $22,000
B) $7,500; $27,500
C) $750; $20,750
D) $75; $20,075

Question

Quizplus · Accepted Answer

Interest = Principal × Rate × Time = $20,000 × 10% × (135/360) = $750. Maturity value = Principal + Interest = $20,000 + $750 = $20,750.

Melon Industries Issues a $20,000, 10%, 135-Day Note to Apple