Nyree Co. borrowed $225,000 from Conrad Bank on January 26 with an 8% interest rate for a 45-day note, resulting in total proceeds of $227,794.52.
On January 26, Nyree Co. borrowed $225,000 in cash from Conrad Bank by issuing a 45-day note with an 8% interest rate. To calculate the proceeds of the note, we first need to determine the interest for the 45-day period. The formula for interest is Interest = Principal × Rate × Time. In this case, the principal is $225,000, the rate is 8% (0.08 as a decimal), and the time is 45 days divided by the number of days in a year (365).
Interest = $225,000 × 0.08 × (45/365)
Next, calculate the interest and add it to the principal to find the total
amount repaid.
Interest = $225,000 × 0.08 × (45/365) = $2,794.52 (rounded)
Proceeds = Principal + Interest
Proceeds = $225,000 + $2,794.52 = $227,794.52
Therefore, the proceeds of the note for Nyree Co. amount to $227,794.52.