5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. Th

Question

5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be: A) $11,182.90
B) $11,000.00
C) $11,110.44
D) $11,114.10
Please show formula and working
5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be: A) $11,182.90
B) $11,000.00
C) $11,110.44
D) $11,114.10
5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be: A) $11,182.90
B) $11,000.00
C) $11,110.44
D) $11,114.10
An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be: An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be:

Explanation / Answer

$11,000   40 days note, dated Nov.3

Face Interest   = 12%

Discounted on Nov. 30

Discount rate   = 9%

Interest = $11,000 * 0.12 * 40 days /360 days = $146.67

Maturity Value = $11,000 + $146.67 = $11,146.67

Discount = $11,146.67 * 0.09 * 13days / 360days =$36.23

Proceeds = $11,146.67 -$36.23 = $11,110.44

Thus, answer is Option (c) $11,110.44

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.