For a note receivable that was created on November 1,2018 and is due for repayment on October 31,2019,what is the time fraction needed to compute interest revenue for the year ended December 31,2018?
A)2/12
B)2/10
C)12/12
D)22/12

Question

Quizplus · Accepted Answer

Recall that: Interest = Principal × Interest Rate × Time.For the computation of interest earned through December 31,the time component of this equation will be 2/12 (or the two months from November 1 through December 31 divided by the twelve months covered by the interest rate).

For a Note Receivable That Was Created on November 1,2018