Answer:
C. $307
The note is of value 80,000 and there is a 6% interest on it which means that yearly interest on it will be (Principal * interest rate)
Principal = 80,000
Interest rate = 6%
80,000*0.06=4,800 is the yearly interest rate
But because the note is of 120 days and the year exist of 360 days we need to find the interest rate of 120 days.
120/360 *4,800=1600
So the interest rate for 120 days is 1,600
The note was issued on July 8 and the year ended on July 31 which means that only 23 days of interest will be recognized in the current fiscal year.
So we need to find 23 days of interest
23/120*1600= 307
Explanation:
