Frankenstein Enterprises Received Two Notes from Customers for Sales That

Frankenstein Enterprises received two notes from customers for sales that it made to them in 2009. The notes included: Note A: Dated 5/31/09, principal of $120,000 and interest due 3/31/10.
Note B: Dated 7/1/09, principal of $200,000 and interest at 8% annually, due on 4/1/10.
Frankenstein had accrued interest receivable from these notes of $14,400 in its 12/31/09 balance sheet. What is annual interest rate on Note A?

A) 9.14%
B) 8%
C) 9.74%
D) 9.44% Note B accrued interest for 6 months during 2009: $200,000 .08 6/12 = $8,000.The rest of the interest accrued, $6,400 was from Note A which was held for 7 months in 2009.So, we have the following: $120,000 annual interest rate 7/12 = $6,400.Thus, the annual interest rate on Note A would be ($6,400 / 120,000) 12/7 = 9.14%.