On March 1, 2014, Archer Inc. lent $37,000 to Ron Wood on a 1-year 3% promissory note. The amount of interest to be accrued on December 31 will be: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Question

Quizplus · Accepted Answer

To calculate the accrued interest, we need to use the formula:

Accrued Interest = Principal x Rate x Time

Where: 
- Principal = $37,000 
- Rate = 3% 
- Time = 10/12 (as Ron Wood has held the note for 10 months out of 12)

Accrued Interest = 37,000 x 0.03 x (10/12) = $925.00

Therefore, the answer is B.