Question

On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019?

Answer 1

$5,450.

Step-by-step explanation:

Payment of Interest expenses = $15,000 * 3% = $450

Principal repayment = $5,000

Total cash payment on March 1, 2019 = $5,000 + $450 = $5,450.

Therefore, the amount of total cash payment that Mandy will make on March 1, 2019 is $5,450.