An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (1)
Calculate the interest for the Parker note: $36 , 000 × 0.10 × 360 90 = $900 .
Calculate the interest for the AKR Bank note: $84 , 000 × 0.10 × 360 120 = $2 , 800 .
Calculate the accrued interest for the Chicago Bank note: $81 , 000 × 0.08 × 360 33 = $594 .
The total interest expense is $900 + $2 , 800 + $594 = $4 , 294 .
Explanation
Problem Analysis Let's break down the calculation of interest expense for each note to ensure accuracy and understanding. We'll cover the Parker note, the AKR Bank note, and the Chicago Bank note, detailing the principal, interest rate, and time period involved.
Parker Note Details First, we analyze the Parker note. The company replaced an account payable with a note. The principal amount of the Parker note is $36 , 000 , the interest rate is 10% or 0.10 , and the duration is 90 days.
Parker Note Interest Calculation The interest expense for the Parker note is calculated as follows: Interest = Principal × Interest Rate × Time Interest = $36 , 000 × 0.10 × 360 90 = $900 So, the interest expense for the Parker note is $900 .
AKR Bank Note Details Next, we analyze the AKR Bank note. The principal amount of the AKR Bank note is $84 , 000 , the interest rate is 10% or 0.10 , and the duration is 120 days.
AKR Bank Note Interest Calculation The interest expense for the AKR Bank note is calculated as follows: Interest = Principal × Interest Rate × Time Interest = $84 , 000 × 0.10 × 360 120 = $2 , 800 Thus, the interest expense for the AKR Bank note is $2 , 800 .
Chicago Bank Note Details Now, we analyze the Chicago Bank note. The principal amount of the Chicago Bank note is $81 , 000 , the interest rate is 8% or 0.08 , and the duration from November 28 to December 31 is 33 days.
Chicago Bank Note Interest Calculation The accrued interest expense for the Chicago Bank note is calculated as follows: Interest = Principal × Interest Rate × Time Interest = $81 , 000 × 0.08 × 360 33 = $594 Therefore, the accrued interest expense for the Chicago Bank note is $594 .
Total Interest Expense Verification Finally, we verify the total interest expense. The total interest expense is the sum of the interest expenses for the Parker note, the AKR Bank note, and the Chicago Bank note: Total Interest = $900 + $2 , 800 + $594 = $4 , 294 The total interest expense is $4 , 294 .
Summary of Results In summary:
Parker note: Principal = $36 , 000 , Interest rate = 10% , Days = 90, Interest = $900 .
AKR Bank note: Principal = $84 , 000 , Interest rate = 10% , Days = 120, Interest = $2 , 800 .
Chicago Bank note: Principal = $81 , 000 , Interest rate = 8% , Days = 33, Interest = $594 .
Total interest expense: $4 , 294 .
Examples
Understanding and calculating short-term liabilities and interest expenses is crucial for businesses to manage their finances effectively. For instance, when a company borrows money to fund its operations, it needs to account for the interest expense associated with the loan. Accurately calculating these expenses ensures that the company's financial statements reflect a true picture of its financial health. This is also important for making informed decisions about borrowing and managing debt.
