The interest portion of an installment note payment is computed by a. dividing the carrying amount (book value) of the note at the beginning of the period by the interest rate. b. multiplying the interest rate by the carrying amount (book value) of the note at the beginning of the period. c. multiplying the interest rate by the carrying amount (book value) of the note at the end of the period. d. dividing the carrying amount (book value) of the note at the end of the period by the interest rate.

Question

Urijah Hoover

Business

21 March, 05:02

The interest portion of an installment note payment is computed by a. dividing the carrying amount (book value) of the note at the beginning of the period by the interest rate. b. multiplying the interest rate by the carrying amount (book value) of the note at the beginning of the period. c. multiplying the interest rate by the carrying amount (book value) of the note at the end of the period. d. dividing the carrying amount (book value) of the note at the end of the period by the interest rate.

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Answers (1)

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Camren Nielsen · Answer 1

b. multiplying the interest rate by the carrying amount (book value) of the note at the beginning of the period.

Explanation:

To solve for interest doing

principal x rate x time

being time and rate express inthe same metric. Which means, if the rate is annual we express time as complte year or portion of years.

If the rate is monthly we express time in months.

We will multiply the principal beginnign balance as that is the one which has been exposed to interest during the time period.