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The interest charged on a $50,000, 60-day note payable, at the rate of 6%, would be group of answer choices

a. $1,667.
b. $500.
c. $3,000.
d. $750.

1 Answer

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Final answer:

The interest charged on a $50,000, 60-day note at 6% would be approximately $493.15, calculated using the formula Interest = Principal × rate × time with time converted to years and rate as a decimal.

Step-by-step explanation:

In the context of calculating interest on a $50,000, 60-day note payable at a 6% interest rate, the correct approach is to use the simple interest formula: \( \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \).

For this calculation:

- Principal (\(P\)) is $50,000.

- Rate (\(R\)) is 6%, or 0.06 when expressed as a decimal.

- Time (\(T\)) is 60 days, converted to years by dividing by 365 (\(T = \frac{60}{365}\)).

Plugging these values into the formula:

\[ \text{Interest} = $50,000 \times 0.06 \times \frac{60}{365} \]

\[ \text{Interest} \approx $493.15 \]

The correct interest amount is approximately $493.15, not $3,000 as mentioned in the student's question. This calculation reflects the interest charged on the note over the specified 60-day period at the given interest rate. The accurate interest amount aligns with the principles of simple interest and provides a more reasonable and expected result compared to the erroneously mentioned $3,000.

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