Business Mathematics Chapter 11 Homework 1. A $25,000/15%, 80-day note dated Nov

Question

Business Mathematics Chapter 11 Homework 1. A $25,000/15%, 80-day note dated November 5, is discounted is the discount period? , at National Bank on January 5. What The maturity value of a $20,000, 7%, 75-day interest-bearing note dated Sept 3. J. Ryan discounts an 80-day note for $15,000 at 12%. The bank discount is (assume ordinary interest): Complete the following for this interest-bearing note that is discounted at 11%.Vse 360 days. Principal Ratc of Time MatDa Date Diss Procceds soo. ( xx , 5% 50 days. A June 2-June 2, 11 Valuc Note Note Period Made Dise Intcrest ina note that is discounted at 11%. (Use 360

Explanation / Answer

1. 80 day note dated november 5 means the bond will mature after 80 days i.e. bond will mature on 24 january.

Now since it is discounted on Jaunary 5, the discount period is 24-5 = 19 days.

2. Maturity value of $20,000, 7% 75 day interest bearing note is 20000*7%*75/360 + 20000 = $20,291.67

3. 80 day note discounted at 12% means the discounted value today is X (say)

then X*12%*80/360 + X = 15000

1.0267 X = 15000

X = $14,610.39

So bank discount is 15000 - 14610.39 = $389.61

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

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