When Calculating Interest on a Promissory Note with the Maturity

question 176

Multiple Choice

When calculating interest on a promissory note with the maturity date stated in terms of days the

• A) maker pays more interest if 365 days are used instead of 360.
• B) maker pays the same interest regardless if 365 or 360 days are used.
• C) payee receives more interest if 360 days are used instead of 365.
• D) payee receives less interest if 360 days are used instead of 365.

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Definitions:

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Expenses that change in proportion to the level of goods or services produced, such as raw materials or direct labor costs.

High-Low Method

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A form of energy resulting from the existence of charged particles, used as a power source.