The interest on a $20,000 face value, 90-day note that bears interest at 9 percent is?
A)$300
B)$450
C)$900
D)$1,800

Question

Quizplus · Accepted Answer

To calculate interest, we use the formula:

Interest = Principal * Rate * Time

In this case, the principal (face value) is $20,000, the rate is 9%, and the time is 90 days (which we need to express as a fraction of a year).

Interest = $20,000 * 0.09 * (90/365)

Interest = $450.

Therefore, the answer is B) $450.

The Interest on a $20,000 Face Value, 90-Day Note That