Accent Flooring The company received a promissory note from a customer on March 1,2012.The principal amount of the note is $20,000;the terms are 3 months and 9% annual interest.
-Refer to the information for Accent Flooring.What is the total amount of interest the company will receive when the note is collected?

Question

Quizplus · Accepted Answer

To calculate the amount of interest received, we first need to determine the interest rate for 3 months. We can calculate this by dividing the annual interest rate by 4 (since there are 4 quarters in a year).

9% / 4 quarters = 2.25% per quarter

Next, we can calculate the interest on the note by multiplying the principal by the interest rate and the time period:

$20,000 x 2.25% x 3 months = $1,350

Therefore, the total amount of interest the company will receive when the note is collected is $1,350.

Accent Flooring the Company Received a Promissory Note from a Customer