Question

Compute the interest accrued on each of the following notes payable owed by Northland, Inc. on December 31:

Use 360 days for calculations and round to the nearest dollar.

Lender Date of Note Principal Interest Rate (%) Term
Maple November 21 $23,000 10% 90days
Wynam December 13 19,000 9% 60days
Nahn December 19 21,000 12% 120days

Answer 1

Explanation:

The computation of accrued interest for each is shown below:

For Maple

= $23,000 × 10% × 40 days ÷ 360 days

= $255.56

The 40 days are counted from 9 days in November and 31 days in December month

For Wynam

= $19,000 × 9% × 18 days ÷ 360 days

= $855

The 18 days are taken from 18 days in December month              

For Nahn

= $21,000 × 12% × 12 days ÷ 360 days

= $840

The 12 days are taken from 18 days in December month  

Answer 2

The interest accrued on Maple is $256, Wynam is $855 and Nahn is $840

Given that,

• Maple lender amount is $23,000 and days between Nov 21 - Dec 31 is 40 days.

• Wynam lender amount is $19,000 and days between Dec 13 - Dec 31 is 18 days.

• Nahn lender amount is $21,000 and days between Dec 19 - Dec 31 is 12 days.

According to the scenario, computation of interest accrued on each are as follows:

Maple

= $23000 $\times$ 10% $\times$ (40days $\div$ 360days)

= $255.56 or $256.

Wynam

= $19000 $\times$ 9% $\times$ (18days $\div$ 360days)

= $855            

Nahn

= $21000 $\times$ 12% $\times$ (12days $\div$ 360days)

= $840

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