Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, the total payment will be
A) $51,125
B) $54,500
C) $1,125
D) $4,500

Question

Quizplus · Accepted Answer

To calculate the total payment for the note payable, we need to find the interest accrued for the 90-day period and add it to the principal amount.

Interest = Principal x Rate x Time 
Time = 90/360 = 0.25 years

Interest = $50,000 x 0.09 x 0.25 = $1,125

Total payment = Principal + Interest 
Total payment = $50,000 + $1,125 = $51,125

Therefore, the correct answer is A) $51,125.

Assuming a 360-Day Year, When a $50,000, 90-Day, 9% Interest-Bearing