Question 1. A three-year, 6%, $42,000 note payable is issued on January 1. Terms include fixed annual principal payments of $14,000, plus interest on the outstanding balance at the end of each year. How much is the total interest expense over the life of the note payable?

a) $5,040

b) $210

c) $1,260

d) $2,520

Question 2. On March 1, Brutto Corp. issues a 3 year, 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. How much would be the remaining balance of the principal after the first blended payment?

a) $58,201

b) $57,000

c) $58,451

d) $55,201