Question

Complete the following table by computing the missing amounts for the following independent cases. (Do not round intermediate calculations. Round "Annual Interest Rate" to 1 decimal place.) Annual Interest Principal Amount on Note Receivable Time Period Rate Earned 102% $ $ 105,000 51,000 b. 6 months 9 months 12 months $ 3.213 $ 4.141 Prev 1 of 3 !!! Next > to search O E Unit 6 - Chapter 3 ...

Answer 1

a)

Interest earned = Principal amount of note x Interest rate x Time period

= 105,000 x 10.2% x 6/12

= $5,355

b)

Interest earned = Principal amount of note x Interest rate x Time period

3,213 = 51,000 x Interest rate x 9/12

Interest rate = 3,213 x 12/9 x 1/51,000

= 8.4%

c)

Interest earned = Principal amount of note x Interest rate x Time period

4,141 = Principal amount of note x 10.1% x 12/12

Principal amount of note = 4,141/10.1%

= $41,000

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