Question

on december 1 2020 eagle company sold machinery to a customer for 22000. the customer could not pay time but agreed to pay 6 months later and signed a 6 month note at 12 % interest. how much interest revenue was earned for the entire term of the note?

Answer 1

Answer:

$1320

Explanation:

Data obtained from the question include:

Principal (P) = $22000

Rate (R) = 12 %

Time (T) = 6 months

There are 12 months in a year i.e

12 months = 1 year.

Therefore, 6 months = 6/12 = 1/2 year

Interest (I) =?

Interest is related to principal, rate and time by the following equation:

I = PRT

I = 22000 x 12% x 1/2

I = 22000 x 12/100 x 1/2

I = $1320

Therefore, the interest revenue earned for the entire term of the note is $1320