Seeing how determined his son was to become an entrepreneur, Ethans father offered to co-sign a note for an amount up to $35,000 to help Ethan open his sweatshirt shop, Sun Devil Sweatshirt Galore. The loan officer advised Ethan that the interest rate on a 12-month loan would be 6.5 percent. Ethan expects the loan to be taken out January 1, 2020 and paid back, along with interest expense, on December 31, 2020.

*This is a part of a budgeting project*

basically it is more of a wording problem to me.

So interest is paid at Dec 31, Do we less interest payment for the quarter ended Dec 31?

if yes, how do we calculate interest?

is it 35000*0.065=2275 calculating the interest annually

or 35000*0.065*12=27300 calculating interest of the principle for the 12 months

or???