A company borrowed $16,000 by signing a 4-month promissory note at 12%. The total interest on the note is $640.

Name: A company borrowed $16,000 by signing a 4-month promissory note at 12%. The total interest on the note is $640.
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Question

Quizplus · Accepted Answer

To confirm, we can use the formula:
Interest = (Principal x Rate x Time)
where
Principal = $16,000
Rate = 12% per annum = 0.12/12 per month
Time = 4 months

Plugging in the values, we get:
640 = (16,000 x 0.12/12 x 4)
640 = 640

Therefore, the answer is A (True).

A Company Borrowed $16,000 by Signing a 4-Month Promissory Note