Assuming a 360-day year, the interest charged by the bank, at the rate of 9%, on a 90-day, discounted note payable of $100,000 is
A) $9,000
B) $2,250
C) $750
D) $1,000

Question

Quizplus · Accepted Answer

For a 90-day note payable, the interest can be calculated as follows:

Interest = Principal x Rate x Time
Time = (90 days) / (360 days/year) = 0.25 years

Interest = $100,000 x 0.09 x 0.25 = $2,250

Therefore, the answer is choice B.

Assuming a 360-Day Year, the Interest Charged by the Bank