A business accepts a 12 percent,$94,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?
A)$105,280
B)$127,840
C)$116,560
D)$94,000

Question

Quizplus · Accepted Answer

The simple interest formula is I = PRT, where P is the principal ($94,000), R is the rate (12% or 0.12), and T is the time (3 years). The interest I = $94,000 * 0.12 * 3 = $33,840. The total amount received is the principal plus interest: $94,000 + $33,840 = $127,840.

A Business Accepts a 12 Percent,$94,000 Note Due in Three