What is the accrued interest after 3 months on a one-year, $1,000 note at a 9% annual interest rate?

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Multiple Choice

What is the accrued interest after 3 months on a one-year, $1,000 note at a 9% annual interest rate?

Explanation:
Interest on a note accrues in proportion to time at the annual rate. For three months, the time fraction is 3/12 = 0.25 of a year. Multiply the principal by the annual rate and the time fraction: 1000 × 0.09 × 0.25 = 22.5. So the accrued interest is 22.5. The other options come from misapplying the time fraction, not using 0.25 for three months.

Interest on a note accrues in proportion to time at the annual rate. For three months, the time fraction is 3/12 = 0.25 of a year. Multiply the principal by the annual rate and the time fraction: 1000 × 0.09 × 0.25 = 22.5. So the accrued interest is 22.5. The other options come from misapplying the time fraction, not using 0.25 for three months.

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