Valley Spa purchased $7,800 in plumbing components from Tubman Co.Valley Spa Studios signed a 60-day,10% promissory note for $7,800.If the note is dishonored,what is the amount due on the note? (Use 360 days a year.)

Question

Quizplus · Accepted Answer

The formula for calculating the dishonored amount of a promissory note is:

Dishonored Amount = Principal x (1 + Interest Rate x Number of Days Past Due / Number of Days in a Year)

In this case, the principal is $7,800, the interest rate is 10%, and the number of days past due is 60.

Therefore, the dishonored amount is:

Dishonored Amount = $7,800 x (1 + 0.10 x 60 / 360) = $7,930

So, the correct answer is C.

Valley Spa Purchased $7,800 in Plumbing Components from Tubman Co