A company borrowed $10,000 by signing a 180-day promissory note at 9%.The total interest due on the maturity date is: (Use 360 days a year.)

Question

Quizplus · Accepted Answer

The interest on the promissory note can be calculated using the simple interest formula:

I = PRT

Where:
I = Interest
P = Principal (amount borrowed)
R = Rate (in decimal form)
T = Time (in years)

In this case, P = $10,000, R = 0.09, and T = 180/360 = 0.5 years (since there are 360 days in a year according to the question). Plugging these values into the formula:

I = $10,000 x 0.09 x 0.5
I = $450

Therefore, the total interest due on the maturity date is $450, which is option C.

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