A company signs a note payable for $4,500 at 11% for 65 days. How much interest (to the nearest cent)will the company owe using a 360-day year? (Round your final answer to the nearest cent.)
A)$495.00
B)$88.15
C)$89.38
D)$99.21

Question

Quizplus · Accepted Answer

Interest = (Principal x Rate x Time)/360

Principal = $4,500
Rate = 11%
Time = 65/360 (since it is a 360-day year)

Interest = (4,500 x 0.11 x 65/360) = $89.38

Therefore, the company will owe $89.38 in interest. The best choice is C.

A Company Signs a Note Payable for $4,500 at 11