The total amount of interest that will be paid on a four-month, $6,500, 9% note payable...

The total amount of interest that will be paid on a four-month, $6,500, 9% note payable equals:

Multiple Choice

$585.

$292.

$146.

$195.

Expert Solution

* All working forms part of the answer

* Note is of 4 months, hence 4 month interest will be paid.

* Working

A	Amount of Note	$ 6,500.00
B	Interest rate [annual]	9%
C = A x B	Annual [12 months] interest	$ 585.00
D = C x (4 months/12months)	4 months Interest	$ 195.00 [585 x (4/12)]

* Hence, the correct answer is Option 4th (Last Option): $ 195

ekkarill92 answered 1 year ago

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