The following 6%,$1,000 notes were issued on November 1.Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?
A)Interest on a 4-month note is calculated as: $1,000 × 6% × 2 / 12.
B)Interest on a 3-month note is calculated as: $1,000 × 6% × 2 / 3.
C)Interest on a 4-month note is calculated as: $1,000 × 6% × 2 / 4.
D)Interest on a 2-year note is calculated as: $1,000 × 6% × 2 / 24.

Question

Quizplus · Accepted Answer

As of December 31,two months have passed since each of the notes was signed.As a result,each of the calculations should include a time factor of 2 / 12.That factor is correctly set forth for the 4-month note.

The Following 6%,$1,000 Notes Were Issued on November 1