Question

Determine Due Date and Interest on Notes

Determine the due date and the amount of interest due at maturity on the following notes:

	Date of Note	Face Amount			Interest Rate	Term of Note
a.	January 10*	$40,000			5%	90 days
b.	March 19	18,000			8	180 days
c.	June 5	90,000			7	30 days
d.	September 8	36,000			3	90 days
e.	November 20	27,000			4	60 days

*Assume that February has 28 days.

Assume 360-days in a year when computing the interest.

Answer 1

Based on the information available in the question , we can calculate the amount of interest due and due date as follows:-

S.No	Date of Note	Face Amount	Interest rate	Term of Note(in days)	Amount of Interest due at maturity	Due Date
a.)	January 10th	40,000	5%	90	500	April 10th
b.)	March 19th	18,000	8%	180	720	September 15th
c.)	June 5th	90,000	7%	30	525	July 5th
d.)	September 8th	36,000	3%	90	270	December 7th
e.)	November 20th	27,000	4%	60	180	January 19th

The Interest due for any year is calculated as follows:-

Face Amount * Interest rate * (Term of Note-in days/360)

For example a.) = $40,000 * 5% * 90/360 = $500

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