Answer:
option (c) $5,000
Explanation:
Data provided in the question:
Amount borrowed = $500,000
Interest rate for 12 months = 6%
Interest rate for a month = [tex]\frac{6\%}{12}[/tex] = 0.5%
Period from November 1, 2012 to December 31, 2012 = 2 months
Now,
Total interest for 2 months = 2 × Interest per month
= 2 × 0.5%
= 1%
Therefore,
The interest payable on December 31, 2012 = Amount borrowed × Interest
= $500,000 × 1%
= $500,000 × 0.01
= $5,000
Hence,
The correct answer is option (c) $5,000
