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18 October, 11:37

Taylor bank lends guarantee company $150,000 on january 1. guarantee company signs a $150,000, 8%, 9-month note. the entry made by guarantee company on january 1 to record the proceeds and issuance of the note is

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  1. 18 October, 13:51
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    We are given

    P = $15,000

    i = 8% per year

    n = 9 months

    First we convert the interest to per month

    i = 8%/12 = 0.67%

    And we solve for the future worth of the note

    F = P (1 + i) ^n

    F = 15000 (1 + 0.0067) ^9

    F = $15929.12

    The value of the note is $15929.12
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