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Question
ttps://edugen.wileyplus.com/edugen/lti/main.uni Return to Blackboard el, Financial Accounting, 8e I System Announcements Brief Exercise 8-8 Presented below are data on three promissory notes. Determine the missing amounts. (Round answers for Total Interest to o decimal places, e.o. 825, Round ann ual Note Terms Maturity Date Principal Annual Interest Rate Total Interest (a) April1 (b) July2 (c) March 7 60 days May 31 30days August 1 6 months September 7 113,270 $648,000 996 90,920 $682 10% SHow LIST OF ACCOUNTS LINK TO TEXT Question AtExplanation / Answer
Solution:
Part (a) –
Total interest = Principal amount x terms / number of days in a year x Rate of Interest
= $648,000 x 60 / 365 x 9%
= $9,587
Part (b) ---
Annual Interest Rate = Total Interest / (Principal Amount x Terms / Number of Days in a year) x 100
= $682 / ($90,920 x 30 / 365) x 100
= 9.13% or 9%
Pact c ---
Total interest = Principal amount x terms / number of months in a year x Rate of Interest
= $113,270 x 6 / 12 x 10%
= $5,663.50 or $5,664
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