A business accepts a 9 percent,$25,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?
A) $25,000
B) $25,075
C) $25,740
D) $27,260

Question

Quizplus · Accepted Answer

To calculate the amount the business will receive when the note falls due, we need to use the simple interest formula:

I = P*r*t

Where: 
- I = Interest 
- P = Principal 
- r = interest rate as decimal 
- t = time in years

In this case, P = $25,000, r = 9% = 0.09 (as a decimal), and t = 120/365 = 0.3288 years (since there are 365 days in a year).

So,

I = $25,000 * 0.09 * 0.3288 = $721.80

Therefore, the total amount the business will receive when the note falls due is:

$25,000 + $721.80 = $25,721.80

Rounding this to the nearest dollar, we get:

$25,740

So the best choice is C: $25,740.

A Business Accepts a 9 Percent,$25,000 Note Due in 120