Question

On August 21, Alix Company receives a $2,000, 60-day, 6% note from a customer as payment on her account. How much interest will be due on October 20 - the due date?

a. $10
b. $20
c. $140
d. $120

Answer 1

b. $20

Step-by-step explanation:

Calculation of how much interest will be due on October 20 - the due date

Using this formula

Interest due = Amount received ×Numbers of days ×Note percentage

Let plug in the formula

Interest due =$2,000 x (60/360) x 0.06

Interest due=$2,000×0.17×0.06

Interest due =$20

Therefore $20 interest is the amount of interest that will be due on October 20the due date.