NEED HELP ASAS 8 When calculating interest on a promissory note with the maturit

Question

NEED HELP ASAS 8

When calculating interest on a promissory note with the maturity date stated in terms of days, the

maker pays more interest if 365 days are used instead of 360.

maker pays the same interest regardless if 365 or 360 days are used.

payee receives more interest if 360 days are used instead of 365.

payee receives less interest if 360 days are used instead of 365.

maker pays more interest if 365 days are used instead of 360.

maker pays the same interest regardless if 365 or 360 days are used.

payee receives more interest if 360 days are used instead of 365.

payee receives less interest if 360 days are used instead of 365.

Explanation / Answer

Suppose Interest has to paid before base of no. of days of year =    131,400.00 Case -1 If base is 365 Interest to be paid = 131400/365 = 360 Case-2 If base is 360 Interest to be paid = 131400/360 = 365 Thus, It is cleared from above , by taking 360 base, maker pays more interest tha 365 days base. Thus, corect statement is payee receives more interest if 360 days are used instead of 365.

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