Answer:
See explanation below
Explanation:
Required:
Determine the maturity date and compute interest
1) Given:
Contract date : March 1
Interest :$10,000
Rate: 6%
Period of note: 60 days
The maturity date for this will be 2 months(60 days) from March 1. Therefore maturity date is May 2.
Interest will be calculated as:
[tex] 10000 * 0.06 * \frac{60}{360} = 100[/tex]
Therefore, interest = $100
2) Given:
Contract date : May 15
Interest :$15,000
Rate: 8%
Period of note: 90 days
The maturity date for this will be 3 months(90 days) from May 15. Therefore maturity date is August 13.
Interest will be calculated as:
[tex] 15000 * 0.08 * \frac{90}{360} = 300[/tex]
Therefore, interest = $300
3) Given:
Contract date : October 20
Interest :$8,000
Rate: 4%
Period of note: 45 days
The maturity date for this will be 45 days from October 20. Therefore maturity date is December 4.
Interest will be calculated as:
[tex] 8000 * 0.04 * \frac{45}{360} = 40[/tex]
Therefore, interest = $40
Compute the values:
_________________________
Contract date: March 1.
Maturity month: May
Maturity date: May 2.
Interest Expenses: $100
_____________________________
Contract date: May 15.
Maturity month: August
Maturity date: August 13.
Interest Expenses: $300
______________________________
Contract date: October 20.
Maturity month: December
Maturity date: December 4.
Interest Expenses: $40
______________________________
