Comparison of Simple and Compound Interest On June 30, 2017, Rolloff Inc. borrowed $25,000 from...
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Accounting
Comparison of Simple and Compound Interest
On June 30, 2017, Rolloff Inc. borrowed $25,000 from its bank, signing a 6% note. Principal and interest are due at the end of two years.
Required:
1. Assuming that the note earns simple interest for the bank, calculate the amount of interest accrued on each of the following dates:
December 31, 2017 December 31, 2018 June 30, 2019
Dec. 31, 2017
$fill in the blank 1
Dec. 31, 2018
fill in the blank 2
June 30, 2019
fill in the blank 3
Total accrued
$fill in the blank 4
2. Assume instead that the note earns 6% for the bank but is compounded semiannually. Calculate the amount of interest accrued on the same dates as in part (1). Round your answers to the nearest whole dollar, with each step in your calculation.
Dec. 31, 2017
$fill in the blank 5
Dec. 31, 2018
fill in the blank 6
June 30, 2019
fill in the blank 7
Total accrued
$fill in the blank 8
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