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25 April, 22:12

Sodium Inc. borrowed $175,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?

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  1. 25 April, 22:27
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    The amount of interest that is recognized for the period from April 1 to December 31 is $15,750

    Explanation:

    According to the given data we have the following:

    interest=12%

    From April 1 to December 31 we have 9 months

    Sodium Inc. borrowed $175,000

    Therefore, in order to calculate the amount of interest that is recognized for the period from April 1 to December 31 we would have to make the following calculation:

    Interest for 9 months = $175,000 x 12% x 9 months / 12

    Interest for 9 months=$15,750

    The amount of interest that is recognized for the period from April 1 to December 31 is $15,750
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