   # Marathon Peanuts converts a \$130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. \$2,600 B. \$7,800 C. \$137,800 D. \$132,600 FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

Chapter
Section FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 12, Problem 15MC
Textbook Problem
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## Marathon Peanuts converts a \$130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months?A. \$2,600B. \$7,800C. \$137,800D. \$132,600

To determine

Concept introduction:

Simple interest:

Simple interest is the amount of interest paid on the principal amount using a fixed interest rate. The formula to calculate the Simple interest is as follows:

Simple Interest = Principal amount x Interest rate x Period

To choose:

The amount of interest.

### Explanation of Solution

The amount of interest is calculated as follows:

Principal amount = \$130,000

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