home work question

comp holds a 90 day receivable of 10,000 from a customer. The note is dated oct 31 and has a 12% interest rate. your comp year ends on dec 31. how much interest revenue do you accrue on dec 31?

I said 10,000X.12= 1200*2/12=200 my answer is 200, am i correct

Superfly999

Yes, I believe you are. The note was dated at the end of October and only 2 months passed in the question. The 12% is annual interest and only 2 months passed so only 2% interest is incurred. So your calculations are correct.

CaptainForest

200, correct

wizzard23

the note is good for 90 days only.
10,000 x 12% = 1,200 x 90 / 360 = 300.00
it's 2 monhts passed, so interest accrued computation will be: 300 X 60 / 90 = 200.
Banker's rule is using 360 days.
You're right!