Palmer Transit Company invested $70,000 in a tax-anticipation note on June 30, 2020. The note earns 12% interest compounded monthly (1% per month) and matures on March 31, 2021.
Required:
1. Prepare the cash flow diagram for this investment.
2. Determine the amount Palmer will receive when the note matures.
3. Determine how much interest Palmer will earn on this investment from June 30, 2020, through December 31, 2020.