On December 1,2016,Gardner Products borrowed $83,000 on a 8%,10-year note with annual installment payments of $8,300 plus interest due on December 1 of each subsequent year.Which of the following describes the first installment payment made on December 1,2017? (Round your answer to the nearest whole number. )
A)$8,300 principal plus $6,640 interest
B)$8,300 principal plus $664 interest
C)$8,300 principal plus $8,300 interest
D)$6,640 interest only

Question

Quizplus · Accepted Answer

The first installment payment includes the principal payment of $8,300 and the interest for one year. The interest for the first year is calculated as $83,000 * 8% = $6,640. Therefore, the first installment payment is $8,300 principal plus $6,640 interest.

On December 1,2016,Gardner Products Borrowed $83,000 on a 8%,10-Year Note