Question

Valley Designs issued a 90-day, 6% note for $60,000, dated April 22, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest. a. Determine the due date of the note. July 21 b. Determine the maturity value of the note.

Answer 1

a. 21 July

b. $30,900

Step-by-step explanation:

a. The computation of due date of the note is shown below:-

= 8 + 31 + 30 + 21

= 21 July

b. The computation of maturity value of the note is shown below:-

Maturity value of the note = Principal + Interest

= $60,000 + ($60,000 × 6% × 90 ÷ 360)

= $30,000 + $450

= $30,900

Therefore we have applied the above formula.