On July 9, Mifflin Company receives an $8,500, 90-day, 8% note from customer Payton Summers as payment on account. Compute the amount due at maturity for the note and interest. (Use 360 days a year.)

$8,670 and $170

Explanation:

The computation of the amount due at the time of maturity and the interest is shown below:

For interest, it is

= Received amount × rate of interest × number of months ÷ total number of months in a year

= $8,500 × 8% × 90 ÷ 360 days

= $170

And, the amount due at the time of maturity of the note is

= Received amount + interest

= $8,500 + $170

= $8,670

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