On the maturity date of a $8,400, 3-month, 11% note, the borrower sends a check that includes the principal and all of the interest due on the note

Finance Oct 06, 2020

On the maturity date of a $8,400, 3-month, 11% note, the borrower sends a check that includes the principal and all of the interest due on the note. What is the amount of the borrower's check?

Expert Solution

Computation of Amount of Borrower's Check:

Amount of Borrower's Check or Maturity Amount = Principal amount + Interest amount

Here,

Principal Amount = $8,400

Interest Amount= Principal * Interest rate* Time = $8,400 *11%*3/12 = $231

Amount of Borrower's Check or Maturity Amount = Principal amount + Interest amount = $8,400+$231 = $8,631

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