Question

Presented below are data on three promissory notes. Determine the missing amounts. (Round answers for Total Interest to 0 decimal places, e.g. 825. Round annual interest rate to O decimal places, e.g. 15%. Use 360 days for calculation.) Date of Note Terms Maturity Date Principal Annual Interest Rate Total Interest (a) April 1 60 days May 31 $750,000 8% $ (b) July 2 30 days August 1 84,000 $490 August 1 September 7 (c) March 7 6 months 150,000 9% $

Answer 1

• Requirement

	Date of Note	Terms	Maturity Date	Principal	Annual Interest rate	Total Interest
a	01-Apr	60 days	31-May	$750,000	8%	$10,000
b	02-Jul	30 days	01-Aug	$84,000	7%	$490
c	07-Mar	6 months	07-Sep	$150,000	9%	$6,750

• Total Interest calculation:
  --For [a] = $ 750000 x 8% x 60 days / 360 days = $ 10000
  --For [c] = $ 150000 x 9% x 6 months / 12 months = $ 6750
• Annual Interest rate for [b]
  >360 days Interest = $ 490 x 360 days / 30 days = $ 5880
  >Annual interest rate = ($5880 / $ 84000) x 100 = 7%