Suppose a company borrows 15,000 on 1/1/14 at 10% interest rate for a one year term. The company makes interest payments every q

Question

3 years ago

11

Suppose a company borrows 15,000 on 1/1/14 at 10% interest rate for a one year term. The company makes interest payments every q

uarter but accrued for the interest expense each month. Assuming they used the simple interest formula, what amount of interest expense would they record in May?

Mathematics

1 answer:

goblinko [34] · Answer 1 · 2022-02-11T03:56:32+03:00

goblinko [34]3 years ago

5 0

Answer: 125

Step-by-step explanation:

Given that:

The principal = 15000

Rate = 10%

Years = 1 year = 12 month

Interest I = PRT/100

I = (15000 × 10 × 1)/100

I = 1500

The amount of interest expense that would they record in May will be

Interest = I/ 12 = 1500/12 = 125