How much interest will accrue on a $20,000 face value, 120-day note that bears interest at 9 percent a year?
A) $600
B) $900
C) $1,800
D) $3,600 20000 x 120/360 x .09 = 600.

Question

Quizplus · Accepted Answer

The interest will be calculated using the formula: 
Interest = Principal x Rate x Time 
where Principal = face value of the note = $20,000
Rate = 9% per year = 0.09
Time = 120 days / 360 days (for a 360-day year) = 1/3 years

Plugging in the values, we get: 
Interest = $20,000 x 0.09 x 1/3 = $600

Therefore, the correct answer is A.

How Much Interest Will Accrue on a $20,000 Face Value