Question

17. A 100-day note with a face amount of $54,000 and interest rate of 9% is...

17. A 100-day note with a face amount of $54,000 and interest rate of 9% is issued on June 1. (6 points)

Required:

1.Compute the following using a 360-day year:  

  1. Maturity value of the note $___________

  1. Maturity date___________

  1. Interest$___________

2.The note is discounted on July 1. The bank discount rate is 12%. Compute the following:

a. Number of days in the discount period ___________

b. Discount amount$___________   

c.  Proceeds$___________

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Answer #2
Req a.
Amount of Note 54000
Multiply: rate of interest 9%
Annual interest 4,860
Interest amount (4860*100/360) 1,350
Add: Principal amount 54,000.00
Maturity value of note 55,350
Maturity value of note 55,350
Maturity date (29+31+31+9) Sep-09
Interest 1,350
Req b.
Number of days in discount period 70
(30+31+9)
Discount amount (55350*12%*70/360) 1292
Proceeds (55350-1292) 54058
answered by: anonymous
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