Trek Company signed a 11%,10-year note for $158,000.The company paid $2700 as the instalment for the first month.What portion of the first monthly payment is interest expense? (Round to the nearest dollar. )
A)$1448
B)$1252
C)$15,867
D)$30,547

Question

Quizplus · Accepted Answer

The interest expense for the first month is calculated by multiplying the principal amount ($158,000) by the annual interest rate (11%) and then dividing by 12 months. This gives $158,000 * 0.11 / 12 = $1,448.33, which rounds to $1,448.

Trek Company Signed a 11%,10-Year Note for $158,000