The following 12%, $1,000 notes were issued on December 1. Which of the followin
ID: 2416413 • Letter: T
Question
The following 12%, $1,000 notes were issued on December 1. Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described? Interest on a 4-month note is calculated as: $1,000 Times 12% Times 1/12. Interest on a 3-month note is calculated as: $1,000 Times 12% Times 1/3. Interest on a 4-month note is calculated as: $1,000 Times 12% Times 1/4. Interest on a 2-year note is calculated as: $1,000 Times 12% Times 1/24.Explanation / Answer
A) Interest on 4 month note is calculted as $1000*12%*1/12