Question

On April​ 1, 2019, Barnes Services received a​ 9-month note for​ $12,000 at​ 12%. Calculate the amount of interest due at maturity.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

Answer 1

To calculate the interest due at maturity for the 9-month note of $12,000 at 12%, the simple interest formula yields an interest amount of $1,080.

Step-by-step explanation:

The student has asked us to calculate the amount of interest due at maturity for a 9-month note with a principal amount of $12,000 at an interest rate of 12%. To find the interest, we'll use the simple interest formula, which is Interest = Principal × Rate × Time.

First, we need to convert the time into a fraction of a year because the interest rate is an annual rate. There are 12 months in a year, so 9 months would correspond to 9/12 of a year, or 0.75 years. Next, we can plug the values into the formula:

Interest = $12,000 × 0.12 × 0.75 = $1,080

The amount of interest due at maturity would be $1,080, rounded to the nearest dollar as per the question's requirement.

Answer 2

$1,043

Step-by-step explanation:

Assuming a 12% annual rate, we can convert it to a quarterly rate.

The equivalent quarterly rate is 2.9%.

9 months is the sames as 3 quarters, therefore, we can use the following formula to find the full value of the note at maturity:

12,000 = X (1 + 0.029)^3

12,000 = X(0.92)

12,000/0.92 = X

13,043 = X

Therefore, the interest due at maturity is:

13.043 - 12,000 = 1,043