On 1 October 2016,Android Ltd made a loan to one of its customers.The customer signed a 4-month bill for $130,000 at 13%.How much interest revenue did the company record in the year 2017 for this bill?
A)$2817
B)$5633
C)$1408
D)$4225

Question

Quizplus · Accepted Answer

The interest for the 4-month period is calculated as $130,000 * 13% * (4/12) = $5,633. However, since the loan was made on 1 October 2016, only the interest for January 2017 (1 month) is recorded in 2017, which is $130,000 * 13% * (1/12) = $1,408.

On 1 October 2016,Android Ltd Made a Loan to One