On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned for the entire term of the bill?

Question

Quizplus · Accepted Answer

The interest revenue is calculated using the formula: Principal x Rate x Time. Here, the principal is $2,000, the rate is 12% per annum, and the time is 9/12 of a year. So, $2,000 x 0.12 x (9/12) = $180.

On 1 December 2014, Parsons Sales Sold Machinery to a Customer