Interest on a 180-day,10 percent,$10,000 note receivable is
A)$5,001.54.
B)$576.76.
C)$493.15.
D)$2001.26.

Question

Quizplus · Accepted Answer

The formula to calculate interest is:

Interest = Principal x Rate x Time

Where:

Principal = $10,000 
Rate = 10% = 0.10 
Time = 180 days / 360 days (since the interest is for half a year, or 180 days, and the year has 360 days) = 0.5

Using the formula:

Interest = $10,000 x 0.10 x 0.5 = $500

Therefore, the interest on the note receivable is $500.

Option C is the closest answer to $500.

Interest on a 180-Day,10 Percent,$10,000 Note Receivable Is