How Much Interest Will Accrue on a $20,000 Face Value

question 51

Multiple Choice

How much interest will accrue on a $20,000 face value, 120-day note that bears interest at 9 percent a year?

• A) $600
• B) $900
• C) $1,800
• D) $3,600 20000 x 120/360 x .09 = 600.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service, often used to allocate manufacturing overhead.

Machine-Hours

A measure of production activity that quantifies the total hours a machine is operated within a given period.

Forming Department

A division within a manufacturing process where raw materials are shaped into finished products or components.

Finishing Department

The section in a manufacturing process where products are completed, tested, and prepared for delivery.