The interest charged on a $200,000 note payable, at the rate of 6%, on a 3-month note would be
A) $12,000
B) $3,000
C) $4,000
D) $1,000

Question

Quizplus · Accepted Answer

The interest on a note payable is calculated using the formula: Interest = Principal x Rate x Time. Here, Principal = $200,000, Rate = 6% (or 0.06 as a decimal), and Time = 3 months (or 3/12 of a year). Thus, Interest = $200,000 x 0.06 x (3/12) = $3,000.

The Interest Charged on a $200,000 Note Payable, at the Rate