Question

$6,600, 60 day, 5% note, dated April 15, is received from a customer on account. The face value of the note is:

(A) $6,600
(B) $6,655
(C) $6,930
(D) $330

Answer 1

The face value of the note is $6,655.21, which corresponds to option (B).

Step-by-step explanation:

The face value of the note can be calculated using the formula:

Face Value = Principal Amount + Interest

Principal Amount = $6,600

Interest = Principal Amount × Interest Rate × Time Period

Interest = $6,600 × 5% × 60/365

Face Value = $6,600 + ($6,600 × 5% × 60/365)

Calculating this equation yields: $6,655.21

Therefore, the face value of the note is $6,655.21, which corresponds to option (B).