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19 September, 14:53

Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:

a. $90,450

b. $90,000

c. $90,900

d. $91,800

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Answers (1)
  1. 19 September, 17:02
    0
    The correct answer is C

    Explanation:

    The total liability for the loan is computed as:

    Total liability of the loan = Loan amount + Loan amount * Rate * 1 month / Number of months

    where

    Loan amount is $90,000

    Rate is 12%

    Putting the values above:

    Total liability of loan = $90,000 + $90,000 * 12% 1 / 12

    Total liability of loan = $90,000 + $900

    Total liability of loan = $90,900

    Therefore, the aggregate liability for the loan amounts to $90,900
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