Answer:
$360
Explanation:
Interest Expense associated with the loan is the only operating cash flow. We need to calculate the interest expense first
As the note is issued on August 1, year 1, only 5 months has been passed on December 31, year 1, So we calculate the interest expense for only 5 months.
Interest Expense = Value of Note x Stated Interest rate x 5/12 = $10,800 x 8% x 5/12 = $360
It is assumed that the interest is paid on December 31, year 1.
Nirav recently opened a savings account offering 2% annual compound interest, this means that Nirav will earn the same amount of interest each year for four years.
<h3>What is a saving account?</h3>
An account at a retail bank is formally called as a savings account. This is a type of account that person granted a person that his money is safe in a particular bank. Refer to the image below for the complete question.
The given case tells about that <u>what would be the impact</u> of savings account offering 2% annual compound interest on Nirav, then he will earn the same amount of interest compounded each year for four years.
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The correct answer is D. manipulated accounting Procedures.