A six-month note receivable for $4,000 at 12%, dated September 1, 2015, has accrued interest revenue of ________ on December 31, 2015.

Question

Quizplus · Accepted Answer

To calculate the accrued interest revenue, we need to first determine the number of months between September 1, 2015 and December 31, 2015.

September to December is a 3-month period, so the note has accrued interest for 3 months.

Next, we need to calculate the interest earned for those 3 months. We can use the simple interest formula:

Interest = Principal x Rate x Time

Where: 
Principal = $4,000 
Rate = 12% per year, or 1% per month 
Time = 3 months

Interest = $4,000 x 0.01 x 3 = $120

Therefore, the accrued interest revenue on December 31, 2015 is $160 (answer choice C).

A Six-Month Note Receivable for $4,000 at 12%, Dated September