Question

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is A. $6,860B. $7,140C. $7,840D. $7,000

Answer 1

b- $7.140

Step-by-step explanation:

The note has a 12% anual rate of interest, but the note is executable in just 60 days. Is necessary to calculate the interest rate for a minor period as follows:

12% * (60/360) = 0.02 = 2% ----> we multiplied the anual rate for a ratio of 60/360 in order to obtain a 60-day interest rate.

7.000 * ( 1 + 2%) = 7140