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:

Income Statement

A financial statement that shows the company's revenues and expenses over a specific period, leading to its net income or loss.

Net Profit Margin Percentage

A financial metric indicating the percentage of revenue that remains as net income after all expenses are deducted.

Income Statement

A financial document that shows a company's income, expenses, and net profit over a specified period.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to shareholders versus reinvesting in itself.