Question

Prefix Supply Company received a 120 day, 8% note for $96,000, dated April 12 from a customer on account. Assume 360 -days in a year Determine the due date of the note.

Answer 1

The due date for the 120 day, 8% note for $96,000 dated April 12 from Prefix Supply Company is calculated to be August 11 when using a 360-day year.

Step-by-step explanation:

The question requires us to calculate the due date for a note, which involves adding the note's term (120 days) to its start date (April 12). We use a 360-day year as is common in financial calculations.

Here's how you can calculate it:

• Since April has 30 days, from April 12 to the end of April is 18 days (30 - 12).
• Subtract these 18 days from the 120-day term, which leaves 102 days to count starting from May 1.
• May and June have 30 days each, so counting 60 days from May gets us to the end of June. That leaves 42 days (102 - 60).
• With 31 days in July, subtracting 31 from 42 leaves 11 more days to count, which brings us to August 11.

Therefore, the due date of the note is August 11.