A company borrowed $10,000 by signing a 180-day promissory note at 9%.The total to be paid at maturity of the note is: (Use 360 days a year.)

Question

Quizplus · Accepted Answer

The formula for simple interest is:

Simple Interest = Principal x Rate x Time

where time is in years.

Since the time is given in days, we need to convert it to years by dividing by 360:

Time = 180 days ÷ 360 = 0.5 years

Plugging in the values:

Simple Interest = $10,000 x 0.09 x 0.5 = $450

The total to be paid at maturity is:

Total = Principal + Simple Interest = $10,000 + $450 = $10,450

Therefore, the answer is A.

A Company Borrowed $10,000 by Signing a 180-Day Promissory Note