RGF Manufacturing recently signed a $200 000, 4- month note on 22 June. The interest rate is 5%. How much total interest will be due on the note?
A)$3 833
B)$10 000
C)$203 780
D)$3 333

Question

Quizplus · Accepted Answer

The total interest due on the note can be calculated using the formula: Interest = Principal x Rate x Time. Here, the principal is $200,000, the rate is 5% (or 0.05), and the time is 4/12 of a year (since the note is for 4 months). Therefore, Interest = $200,000 x 0.05 x (4/12) = $3,333.33, which rounds to $3,333.

RGF Manufacturing Recently Signed a $200 000, 4- Month Note