[Victoria Victor]

I have $2,000,000 note receivable at 7% over 5 years. I booked 140k interest as receivable at the end of 2007. In 2008 do I book the same amount of interest or do I calucate interest on the interest booked in 2007 as well? So would I calculate the interest on $2,000,0000 or $2,140,000?

[codyman144]

Essentially what you are asking is if the interest is compounding or not. All depends on whether the interest earned was paid to you or if it was kept in the account.

Sounds like a homework question so I am not just going to give you the answer.