Interest calculations, Accounting Basics

Calculate the amount of interest for each of the following independent situations (assume

365 days per year):

   
       

a)  $400,000 is borrowed at 6% interest for 1 year.

       
       

b)  $50,000 is borrowed at an annual interest rate of 4% for 60 days.

       
       

c)  $120,000 is borrowed at an annual interest rate of 7% for 275 days.

       
       

Answer:

     
   

Amount in $

 
       
 

Interest = Principal amount * Rate of interest*Time

       

a)

Interest amount

 =400,000*6%*1

 
   

                 24,000

 
       

b)

Interest amount

 =50,000*4%*60/365

   

                 328.77

 
       

c)

Interest amount

 =120,000*7%*275/365

   

              6,328.77

 

Posted Date: 7/12/2012 3:06:02 AM | Location : United States







Related Discussions:- Interest calculations, Assignment Help, Ask Question on Interest calculations, Get Answer, Expert's Help, Interest calculations Discussions

Write discussion on Interest calculations
Your posts are moderated
Related Questions
Determine in brief about the SALES ACTIVITY Just as merchandizing businesses follow specific procedures to process and record purchases, they follow numerous procedures to proc

A firm is evaluating two machines. The first costs $250,000 and will require annual maintenance of $30,000 per year for 10 years. At the end of 10 years, the salvage value will b

Accounting concepts are used in relation to accounting procedures for a specific business enterprise.  Some of these are: Going concern Verifiable

Q. Describe the Cost of sales? Cost of sales, cost of goods sold -- expense or cost of all items sold during an accountingperiod. Every unit sold has a cost of sales or cost of

Perpetual and Periodic inventory                                                                             a)  Describe the difference between the perpetual inventory method

Maryanne was looking to purchase a local business that sold coal jewelry to tourists along the interstate. The present business owner instructed his accountant, Jane Sane, CPA, to

How to create account for barter transactions? As My Company is providing a service to another company and that company is reimbursing us with his service.

What does receiving a bid do to your business records?

Q. What is Managerial accounting information? A Managerial accounting information is for internal use and provides special information for the managers of a company. The inform

Profitability refers to a company's ability to obtain  profits and positive cash flows and to its ability to obtain an adequate return on invested capital or a company's ability to