←Dirk Ward borrowed $13,000.00 for investment purposes on May 26 on a demand note providing for a variable rate ofinterest and payment of any accrued interest on December 31. He paid $1000 on June 5, $100 on September 27, and$900 on November 24. How much is the accrued interest on December 31 if the rate of interest was 5% on May 26,5.6% effective August 1, and 5.85% effective November 12The accrued interest on December 31 is $(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal placesas needed)

Interest expenses refer to the costs incurred by the business in adopting finance from a lender, in…

Answered: The accrued interest on December 31 is…

The accrued interest on December 31 is $ (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

←
Dirk Ward borrowed $13,000.00 for investment purposes on May 26 on a demand note providing for a variable rate of
interest and payment of any accrued interest on December 31. He paid $1000 on June 5, $100 on September 27, and
$900 on November 24. How much is the accrued interest on December 31 if the rate of interest was 5% on May 26,
5.6% effective August 1, and 5.85% effective November 12
The accrued interest on December 31 is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places
as needed)

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