Question

A company receives on November 1, 2021, a 4-month prepayment of $1,300 for services. What is the total amount of the prepayment?

1) $1,300
2) $5,200
3) $1,625
4) $6,500

Answer 1

The total amount of the prepayment is $5,200 (option 2).

Step-by-step explanation:

The total amount of the prepayment is $5,200 (option 2).

To calculate the total amount of the prepayment, we need to multiply the monthly payment amount by the number of months. In this case, since it is a 4-month prepayment, we multiply $1,300 by 4, which equals $5,200.