On June 8 Williams Company issued an 81600 7 120day note pay

On June 8, Williams Company issued an $81,600, 7%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? Round your answer to the nearest whole dollar.

$5,712

$83,504

$87,312

$81,600

Solution

Total interest expenses=$81600*7%*(120/360)

=$1904

Hence maturity value of the note=($81600+$1904)

which is equal to

=$83504.