Multiple Choice
Island Corporation owes Mutual Bank a 10% note payable for $100,000 plus $8,000 accrued interest on October 1, 2014. Island and Mutual Bank enter into an agreement whereby Island will pay Mutual $128,000 on the due date of the note on October 1, 2016.
-What effective interest rate will Island use for the restructured note?
A) 8.7%
B) 8.9%
C) 10.0%
D) 13.1%
Correct Answer:
Verified
Correct Answer:
Verified
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