On November 1,2017,Brownsville Co.borrowed $80,000 from State Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.At December 31,2017,Brownsville Co.'s overall liability for this loan amounts to

Question

Quizplus · Accepted Answer

Using the simple interest formula, the interest accrued on the loan for two months would be calculated as follows:

Interest = Principal x Rate x Time
Interest = $80,000 x 0.12 x (2/12)
Interest = $1,600

Therefore, the total amount owed by Brownsville Co. on December 31, 2017, would be the principal amount of $80,000 plus the interest of $1,600, which equals $81,600.