The interest on a $5,000 face value, 3-month note bearing interest at 9 percent a year would be $1,350.
5,000 x .09 x 3/12 = $112.50.

Question

Quizplus · Accepted Answer

The calculation in the statement is incorrect. The interest on a $5,000 face value, 3-month note bearing interest at 9 percent a year would be:

Interest = (Principal x Rate x Time) / 12
Interest = (5,000 x 0.09 x 3) / 12
Interest = $112.50

Therefore, the correct answer is B) False.

The Interest on a $5,000 Face Value, 3-Month Note Bearing