On 1 March 2017,Vinnie Services issued a 5% long-term note payable for $18,000.It is payable over a 3-year term in $6000 principal instalments on 1 March of each year,beginning 1 March 2018.Each yearly instalment will include both principal repayment of $6000 and interest payment for the preceding one-year period.What is the amount of total cash payment that the Vinnie will make on 1 March 2018?
A)$6900
B)$6450
C)$6000
D)$18,000

Question

Quizplus · Accepted Answer

The total cash payment on 1 March 2018 includes a $6000 principal repayment and $900 interest (5% of $18,000 for one year), totaling $6900.

On 1 March 2017,Vinnie Services Issued a 5% Long-Term Note