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27 October, 06:23

On November 1, 2018, Tim's Toys borrows $30,000,000 at 9% to finance the holiday sales season. The note is a six-month term and both principal and interest are payable at maturity. What is the balance of loan interest payable of December 31, 2018? a. $112,500 b. $1,350,000 c. $225,000 d. $450,000

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  1. 27 October, 07:21
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    The correct answer is option (D).

    Explanation:

    According to the scenario, the given data are as follows:

    Money borrowed = $30,000,000

    Rate of interest = 9%

    Time = 2 months

    So, we can calculate the balance of loan interest payable by using following formula:

    Balance of loan interest = (Money borrowed * Rate of interest * Time) / 12

    = ($30,000,000 * 9% * 2 months) / 12

    = $450,000

    Hence, the balance of loan interest payable is $450,000.
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Home » Business » On November 1, 2018, Tim's Toys borrows $30,000,000 at 9% to finance the holiday sales season. The note is a six-month term and both principal and interest are payable at maturity. What is the balance of loan interest payable of December 31, 2018? a.
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