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A company borrows money as needed on the first day of the month and repays principal and interest on the last day of the budget period, if cash is available.  For the second quarter of the year, they borrowed $10,000 in April, $8,000 in May and $5,000 in June.  The interest rate is 1% per month.  Assuming enough money is available on June 30th to repay the debt, the total amount of interest due is Blank______.Multiple choice question.$560$230$690

Question

A company borrows money as needed on the first day of the month and repays principal and interest on the last day of the budget period, if cash is available.  For the second quarter of the year, they borrowed 10,000inApril,10,000 in April, 8,000 in May and 5,000inJune. Theinterestrateis15,000 in June.  The interest rate is 1% per month.  Assuming enough money is available on June 30th to repay the debt, the total amount of interest due is Blank______.Multiple choice question.560230230690

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Solution

To calculate the total amount of interest due, we need to consider the amount borrowed each month and the interest rate.

  1. In April, the company borrowed 10,000.TheinterestforApril,May,andJunewouldbe10,000. The interest for April, May, and June would be 10,000 * 1% * 3 months = $300.

  2. In May, the company borrowed 8,000.TheinterestforMayandJunewouldbe8,000. The interest for May and June would be 8,000 * 1% * 2 months = $160.

  3. In June, the company borrowed 5,000.TheinterestforJunewouldbe5,000. The interest for June would be 5,000 * 1% * 1 month = $50.

Adding up the interest for each month gives us a total of 300+300 + 160 + 50=50 = 510.

So, the total amount of interest due is $510. However, this option is not available in the multiple choices provided. There might be a mistake in the question or the options provided.

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