Schmidt Company borrows $10,000 from its bank and signs a 6-month note. Interest, which is due quarterly, is specified in the note as 6%. The Interest rate stated in the loan agreement most likely applies to?

a) a 6-month period

b) an entire year

c) a 3 month period

d) semi-monthly

Question

Business

Kaylin Ball

27 February, 01:44

Schmidt Company borrows $10,000 from its bank and signs a 6-month note. Interest, which is due quarterly, is specified in the note as 6%. The Interest rate stated in the loan agreement most likely applies to?

a) a 6-month period

b) an entire year

c) a 3 month period

d) semi-monthly

+1

Answers (1)

Know the Answer?

Jovany · Answer 1

b) an entire year

Explanation:

Interest rate that is specified on the loan agreement is annual interest rate applicable to the loan on different frequency of interest payments. 6% is the entire years interest rate. Schmidt Company will pay only $150 (10000 x 6% x 3/12) for one quarter. Schmidt Company has only two payments of 3 months interest for this loan in six month duration of loan.

Schmidt Company borrows $10,000 from its bank and signs a 6-month note. Interest, which is due quarterly, is specified in the note as 6%. The Interest rate stated in the loan agreement most likely applies to?a) a 6-month periodb) an entire yearc) a 3 month periodd) semi-monthly

Schmidt Company borrows $10,000 from its bank and signs a 6-month note. Interest, which is due quarterly, is specified in the note as 6%. The Interest rate stated in the loan agreement most likely applies to?

a) a 6-month period

b) an entire year

c) a 3 month period

d) semi-monthly