Answer:
For 2018, the amount of interest would be $640
For 2019, the amount of interest would be $2,560
Explanation:
The amount of interest revenue which the company will acknowledge in the year 2018 is computed as:
Amount of interest revenue = Loan amount × Percentage of note × Number of months / 12
where
Loan amount is $32,000
Percentage of loan is 8%
Number of months will be 3 months (October, November, December). As the loan is made on October 1
Putting the values above:
Amount of interest revenue = $32,000 × 8% × 3/12
Amount of interest revenue = $640
The amount of interest revenue which the company will acknowledge in the year 2019 is computed as:
Amount of interest revenue = Loan amount × Percentage of note
where
Loan amount is $32,000
Percentage of loan is 8%
Putting the values above:
Amount of interest revenue = $32,000 × 8%
Amount of interest revenue = $2,560
