Wrigley Company issued the following notes during 2019 Find

Wrigley Company issued the following notes during 2019. Find the interest due on each of the notes, using the interest formula method.

Analyze:
What is the balance in Notes Payable on December 31, 2019, assuming that all notes were paid when due?

Find the interst due on each of the notes, using the interst formula method. (use the 360 days a year)

1. A $15000 note at 9 percent for 180 days, issued February 15

2. A $14000 note at 12 percent for four months, issued October 3.

3. A $20000 note at 10 percent for 180 days, issued October 18.

What is the balance in Notes Payable on December 31,2019, assuming that all noted were paid when due?

Solution

1)Equation=

First,converting R percent to r a decimal r=R/100=0.09 per year

Putting time into years for simplicity,

180days/360 days a year=0.5 years

Solving equation

A=15000(1+(0.09*0.5)=15675

A=$15675.00

The total amount accrued,principal +interst,from simple interest on a principal of $15000 at a rate of 9% per year for 0.5 years(180 days) is $15675.00

2)in this sum four months means will take it as 120 days

First converting R percent to r a decimal r=R/100=12%=0.12 per year

Putting time into years for simplicity,120 days/ 360 days year=0.33 years

Solving equation

A=14000(1+(0.12*0.33))=14554.4

So A=$14554.40

The total amount accrued, principal + interest.from simple intrtret on a principal of$14000 at a rate of 12% per year for 0.33 years(120 days) is $14554.40

3)in this problem

A=20000

First converting R percent to r a decimal r =R/100=10%/100=0.1 per year.

Putting time into years for simplicity,180 days/360 days/year=0.5 years.

A=20000(1+(0.1*0.5))=21000

A=$21000

The total amount accrued,principal +interest,from simple interest on a principal of $20000 at a rate of 10% per year for 0.5 years (180 days) is $21000

What is the balance in notes payable on december 31,2019,assuming that all noted were paid when due

answer-

1)15000-15675=$675

2)14000--14554.40=$554.40

3)20000-21000=$1000

notes papayable iis the aamount of principal due on a formal written promise which used to pay.