RGF Manufacturing recently signed a $200,000, 138-day note on June 22. The interest rate is 5%. Using a 365-day year, how much interest will be due on the note?
A) $ 10,000
B) $ 3,833.33
C) $ 3,780.82
D) $203,780.82

Question

Quizplus · Accepted Answer

The interest due on the note can be calculated using the formula: Interest = Principal × Rate × Time. Here, Principal = $200,000, Rate = 5% (or 0.05 when expressed as a decimal), and Time = 138/365 years. Therefore, Interest = $200,000 × 0.05 × (138/365) = $3,780.82.

RGF Manufacturing Recently Signed a $200,000, 138-Day Note on June