Assuming a 360-day year, the interest charged by the bank, at the rate of 9%, on a 90-day, discounted note payable for $100,000 is
A) $9,000
B) $2,250
C) $750
D) $1,000

Question

Quizplus · Accepted Answer

First, we need to calculate the interest earned by the bank using the simple interest formula:

Interest = (Principal x Rate x Time) / 360

In this case, the principal is $100,000, the rate is 9%, and the time is 90 days.

Therefore, Interest = (100,000 x 0.09 x 90) / 360 = $2,250

So, the correct answer is B, $2,250.

Assuming a 360-Day Year, the Interest Charged by the Bank