Chang, Inc. issued a 3-month note in the amount of $360,000 on 12/01/17 with an annual rate of 5%. What amount of interest has accrued as of 12/31/17?
A) $4,438
B) $1,500
C) $ 950
D) $4,500
E) $1,479

Question

Quizplus · Accepted Answer

The interest accrued as of 12/31/17 can be calculated using the formula: Interest = Principal x Rate x Time. Here, Principal = $360,000, Rate = 5% (or 0.05 when expressed as a decimal), and Time = 1 month (since we're calculating interest from 12/01/17 to 12/31/17, which is 1/12 of a year). Therefore, Interest = $360,000 x 0.05 x (1/12) = $1,500.