On November 1, 2016, Brownsville Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2016, Brownsville Co.'s overall liability for this loan amounts to:

Question

Quizplus · Accepted Answer

The interest on the loan can be calculated by multiplying the principal amount by the annual interest rate and the time period:
$80,000 x 12% x 6/12 = $4,800

Therefore, the total amount due at maturity (which includes both the principal and interest) is:
$80,000 + $4,800 = $84,800

At December 31, 2016, which is halfway through the loan term, Brownsville Co. would owe:
$80,000 + ($80,000 x 12% x 6/12) = $80,000 + $4,800 = $81,600

So the correct answer is C.