At the beginning of the year, Fellows Inc. accepted a $6,000 face value, 3-year, non-interest-bearing note in exchange for inventory sold. 10 percent (10%) is a reasonable cost of borrowing for non-interest-bearing notes of this nature. The face value is due when the note matures. Required: Answer the following two questions. 

Note: Do not use decimals in your answer and round to the nearest whole dollar. 

Question #1: Rounded to the nearest whole dollar, what is the present value of this note? 

Question #2: Rounded to the nearest whole dollar, how much interest will be recognized on this note over the entire 3 years?

Answer rating: 100% (QA)

To calculate the present value of the noninterestbearing note and the interest recognized over the ... View the full answer