NWA Air Charter signed a four-month note payable in the amount of $20,000 on September 1. The note requires interest at an annual rate of 9%. The amount of interest to be accrued at the end of September is
A) $150.
B) $200.
C) $600.
D) $1,800.

Question

Quizplus · Accepted Answer

To calculate the amount of interest to be accrued at the end of September, we need to use the following formula:

Interest Accrued = Principal x Rate x Time

In this case, the principal is $20,000, the rate is 9% and the time is 1/12 (since one month has passed).

Plugging these values into the formula, we get:

Interest Accrued = $20,000 x 0.09 x 1/12 = $150

Therefore, the answer is A) $150.

NWA Air Charter Signed a Four-Month Note Payable in the Amount