In: Accounting
Wrigley Company issued the following notes during 2019. Find the
interest due on each of the notes, using the interest formula
method.
Analyze:
What is the balance in Notes Payable on
December 31, 2019, assuming that all notes were paid when
due?
Find the interst due on each of the notes, using the interst formula method. (use the 360 days a year)
1. A $15000 note at 9 percent for 180 days, issued February 15
2. A $14000 note at 12 percent for four months, issued October 3.
3. A $20000 note at 10 percent for 180 days, issued October 18.
What is the balance in Notes Payable on December 31,2019, assuming that all noted were paid when due?
1)Equation=
First,converting R percent to r a decimal r=R/100=0.09 per year
Putting time into years for simplicity,
180days/360 days a year=0.5 years
Solving equation
A=15000(1+(0.09*0.5)=15675
A=$15675.00
The total amount accrued,principal +interst,from simple interest on a principal of $15000 at a rate of 9% per year for 0.5 years(180 days) is $15675.00
2)in this sum four months means will take it as 120 days
First converting R percent to r a decimal r=R/100=12%=0.12 per year
Putting time into years for simplicity,120 days/ 360 days year=0.33 years
Solving equation
A=14000(1+(0.12*0.33))=14554.4
So A=$14554.40
The total amount accrued, principal + interest.from simple intrtret on a principal of$14000 at a rate of 12% per year for 0.33 years(120 days) is $14554.40
3)in this problem
A=20000
First converting R percent to r a decimal r =R/100=10%/100=0.1 per year.
Putting time into years for simplicity,180 days/360 days/year=0.5 years.
A=20000(1+(0.1*0.5))=21000
A=$21000
The total amount accrued,principal +interest,from simple interest on a principal of $20000 at a rate of 10% per year for 0.5 years (180 days) is $21000
What is the balance in notes payable on december 31,2019,assuming that all noted were paid when due
answer-
1)15000-15675=$675
2)14000--14554.40=$554.40
3)20000-21000=$1000
notes papayable iis the aamount of principal due on a formal written promise which used to pay.