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4 years ago

Buttner Company borrows $88,500 on September 1, 2014, from Harrington State Bank by signing an $88,500, 12%, one-year note.

Business

1 answer:

oksian1 [2.3K]4 years ago

4 0

Answer:

C.) $3,540

Explanation:

The loan borrowed is the Principal = $88,500

Interest rate per year = 12% or 0.012 as a decimal

Interest accrued formula = Principal * rate * time

Note: time will be from Sep1 - Dec 31 = 4 months or $\frac{4}{12}$ years

Interest accrued = 88,500 * 0.012 * $\frac{4}{12}$

Interest accrued = 3,540

Therefore, as of December 31st, 2014, $3,540 would be the interest accrued hence choice C is correct.

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Answer:

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The formula to compute the monthly payment of a loan is:

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Substitute with n = 10 × 12 and compute:

$Balance=\$190,000(1+(0.08/12))^{(10\times 12)}-\$1,394.15\times \bigg[\dfrac{(1+(0.08/12))^{(10\times 12)}-1}{(0.08/12)}\bigg]$

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