Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 10% promissory note for $7,800. If the note is dishonored at maturity, what is the amount due on the note?

Question

Quizplus · Accepted Answer

The amount due on the note is the face amount of the note plus interest. The interest is calculated as follows:Interest = Principal x Rate x TimeInterest = $7,800 x 10% x 60/360Interest = $130The amount due on the note is $7,800 + $130 = $7,930.

Valley Spa Purchased $7,800 in Plumbing Components from Tubman Co