Question

A company borrowed $22,000 by signing a 180-day promissory note at 6%. The total to be paid at maturity of the note is: (Use 360 days a year.)

Answer 1

Total amount to be paid at maturity of the note is computed as:

Maturity value of note=Amount borrowed+ Interest for note period

Amount borrowed=$22,000

Interest on amount=6%

Note period=180 day

Days in a year=360 days

Interest for note period=(Borrowed amount*Interest % on amount*Note period)/Days in a year

Interest for note period=($22,000*6%*180 days)/360 days

Interest for note period=$660

Maturity value of note=$22,000+$660

Maturity value of note=$22,660