A Loan of P Is Taken Out at a Simple

question 105

Multiple Choice

A loan of P is taken out at a simple interest rate of r = 10.4%.Two months later a loan payment of $500 is made.Of this payment,$198.66 went to actually paying off the loan while $301.34 went towards interest on the loan.What is the value of P? (Answer to nearest dollar)

• A)$2898
• B)$3096
• C)$11,461
• D)$17,385

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Definitions:

Purchases On Account

Transactions where goods are acquired on credit, with payment to be made at a later date.

Subsidiary Ledger

A detailed ledger that contains account information to support the main general ledger accounts.

Adjustment For Supplies

An accounting entry made to account for the change in the supplies' value over a certain period, ensuring the correct expense is recognized.

Recorded The Adjustment

The process of making entries to correct accounts or to account for transactions that have been missed in the financial records.