Question

On July 9, Mifflin Company receives an $8,100, 90-day, 8% note from customer Payton Summers as payment on account. Compute the amount due at maturity for the note and interest.

Answer 1

The amount due at note maturity is $8,262 in which:

+ Principal repayment: $8,100;

+ Interest payment: $162.

Step-by-step explanation:

As at the note maturity:

+ Note principal will be repaid fully at $8,100;

+ Interest payment is for 90 days at the interest rate of 8% which is calculated based on the 360-day per year basis as: Principal x Interest rate x 90/360 = 8,100 x 8% x 90/360 = $162;

=> Total amount due = Principal due + Interest due = 8,100 + 162 = $8,262.