Question

Assuming a 360-day year, when a $20,000, 90-day, 5% interest-bearing note payable matures, total payment will be

Answer 1

The total payment when the $20,000, 90-day, 5% interest-bearing note payable matures is $20,250.

Step-by-step explanation:

To calculate the total payment when the $20,000, 90-day, 5% interest-bearing note payable matures, we need to first calculate the interest earned over the 90 days. The interest is calculated using the formula:

Interest = Principal x Interest Rate x Time

For a 360-day year, the interest will be:

Interest = $20,000 x 0.05 x (90/360)

Interest = $250

The total payment will be the principal amount plus the interest earned:

Total Payment = Principal + Interest

Total Payment = $20,000 + $250 = $20,250

Answer 2

total payment will be $21,000.

Step-by-step explanation:

The Payment at maturity will include, the Principle amount (amount borrowed) and the Interest that accrued over the period of the note payable.

Total Payment Calculation :

Principle amount = $20,000

Interest ($20,000 × 5%) = $1,000

Total Payment = $21,000