Interest calculations, Accounting Basics

Assignment Help:

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

 


Related Discussions:- Interest calculations

What do you mean by purchases account, Q. What do you eman by Purchases acc...

Q. What do you eman by Purchases account? In periodic inventory procedure a merchandising company uses the Purchases account to record the cost of merchandise bought for resale

What is purchase discounts account, Q. What is Purchase Discounts account? ...

Q. What is Purchase Discounts account? The buyer records the purchase discount merely when the invoice is paid within the discount period and the discount is taken. The Purchas

Define bear market, Bear Market Bear market is a market in which stock...

Bear Market Bear market is a market in which stock prices are expected to fall.

Employ governmental accountants, Governmental agencies at the state, federa...

Governmental agencies at the state, federal, and local levels employ governmental accountants. Habitually the duties of these accountants relate to tax revenues and expenditures. F

Error cause a trial balance, Which error will cause a trial balance not to ...

Which error will cause a trial balance not to balance? A an invoice entered as a credit note on original input. B a journal entry that does not balance. C a transaction entere

Difference between billable and non-billable expenses, Billable expenses ar...

Billable expenses are those expenses incurred by you on behalf of your client in performing duties / supply and service. These expenses are recoverable from your customer by way of

Determining needed adjustments, Determining needed adjustments Adjustme...

Determining needed adjustments Adjustments are required since certain changes take place during the accounting period. As time passes, although, the value of the asset is consu

Show money measurement, Accountants frequently cite the going-concern assum...

Accountants frequently cite the going-concern assumption to justify using historical costs rather than market values in measuring assets. Market values are of less implication to a

Accounting concept, define accounting. Explain the accounting concepts whic...

define accounting. Explain the accounting concepts which guide the accountant at the recording stage.

What is the use of balance sheet, Q. What is the use of balance sheet? ...

Q. What is the use of balance sheet? Balance sheet -- a statement of the financial position of a company at a single specific time(often at the close of business on last day

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd