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19 August, 02:29

Michigan Bank lends Detroit Furniture Company $110,000 on December 1. Detroit Furniture Company signs a $110,000, 9%, 4-month note. The total cash paid for interest (only) at maturity of the note is: (Round your final answer to the nearest dollar.)

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  1. 19 August, 02:43
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    The answer is $3,300.

    Explanation:

    To calculate interest paid on an amount, the following formula is used:

    Simple interest = Principal * Rate * Time

    Principal = $110,000

    Rate in decimal = 9% = 0.09

    Time in years = 4 months = 4/12 years

    ∴ Simple interest = $110,000 * 0.09 * 4/12 = $3,300.
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Home » Business » Michigan Bank lends Detroit Furniture Company $110,000 on December 1. Detroit Furniture Company signs a $110,000, 9%, 4-month note. The total cash paid for interest (only) at maturity of the note is: (Round your final answer to the nearest dollar.)
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