Question

on october 31, the bank statement shows that your company has $170,000 from the new national bank on a 6 month , 6% note . assuming no interest has been recorded yet, what is the amount of interest accrued as of december 31, 2015?

Answer 1

Answer:1,700

Step-by-step explanation:

o calculate the interest accrued on a 6-month, 6% note, we need to use the simple interest formula:

Interest = Principal × Rate × Time

Given:

Principal (P) = $170,000

Rate (R) = 6% = 0.06 (in decimal form)

Time (T) = 2 months (from October 31 to December 31)

Note that the time needs to be converted into years for the interest rate to be consistent. Since 1 year has 12 months, 2 months is equivalent to 2/12 or 1/6 of a year.

Using the formula, we can calculate the interest accrued as follows:

Interest = $170,000 × 0.06 × (1/6)

= $170,000 × 0.01

= $1,700

Therefore, as of December 31, 2015, the amount of interest accrued would be $1,700.