On June 1, 2014, Siebens Enterprises loaned $20,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory note, Tyler will repay the principal and pay one year's interest on May 31, 2015.
What total amount of cash will Siebens collect on May 31, 2015?
A) $20,000
B) $20,667
C) $21,600
D) None of these

Question

Quizplus · Accepted Answer

Siebens will collect the principal amount of $20,000 plus one year's interest at 8%, which is $1,600 (calculated as $20,000 * 0.08). Therefore, the total amount collected will be $21,600.

On June 1, 2014, Siebens Enterprises Loaned $20,000 to Tyler