Question

In: Accounting

How much interest does the company owe at the end of three months?

Jacobs Company borrowed 100,000 at 8 percent interest for three months. How much interest does the company owe at the end of three months?

a. $8,000

b. $2,000

c. $800

d. $200

Expert Solution

The interest owed by the Jacob company is :

**Interest calculation for 1 year =100,000*(8/100)**

=8000 per annum

But we need the interest owed at the end of three months

**=8000*(3/12)**

= $2000

Option B - $2000

3 is 3 months

12 is 12 months in a 1 year

The interest owed at the end of three months is $2000

Shaik sultan answered 3 years ago

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