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28 August, 05:30

Suppose a company borrows 15,000 on 1/1/14 at 10% interest rate for a one year term. The company makes interest payments every quarter but accrued for the interest expense each month. Assuming they used the simple interest formula, what amount of interest expense would they record in May?

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  1. 28 August, 07:55
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    Answer: 125

    Step-by-step explanation:

    Given that:

    The principal = 15000

    Rate = 10%

    Years = 1 year = 12 month

    Interest I = PRT/100

    I = (15000 * 10 * 1) / 100

    I = 1500

    The amount of interest expense that would they record in May will be

    Interest = I / 12 = 1500/12 = 125
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