On October 1, 2019, Springfield, Inc. made a loan to one of its customers. The customer signed a 6-month note for $140,000 at 15%. How much interest revenue did the company record in 2020 for this note? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The interest revenue can be calculated using the formula: Interest = Principal x Rate x Time

Here, Principal = $140,000, Rate = 15% and Time = 3/12 (since the note was signed on October 1, 2019 and the question is asking for interest revenue in 2020, which means only 3 months of interest will be earned in 2020).

Using these values, we can calculate interest as:

Interest = $140,000 x 0.15 x (3/12) = $5,250

Therefore, the correct answer is C, $5,250.