When Calculating Interest on a Promissory Note of Less Than

question 98

Multiple Choice

When calculating interest on a promissory note of less than one year, 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.

---

Definitions:

Competitive Strategy

A long-term plan formulated by a company to gain a competitive advantage over its rivals in the industry.

Operating Budget

A comprehensive forecast that outlines expected revenue from sales and all anticipated expenses over a specific time frame, typically one year.

Sales Budget

An estimate of the amount of revenue that will be generated from sales during a specific period.

Budget Slack

The intentional allocation of extra resources in a budget beyond what is strictly needed, providing a cushion for unexpected situations.