Question

Equity Bank lends Boston Furniture Company $100,000 on December 1st on a 6%, 4-month note. The total cash paid for interest (only) at maturity of the note is (Round your final answer to the nearest dollar.):__________

Answer 1

$102,000.

Step-by-step explanation:

The maturity value is the principle + interest.

First calculate the interest:

$100,000 x .06 x (4/12) months = $2,000

Maturity value is $100,000 + $2,000 = $102,000