Question

Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 9%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.)

Face value (principal)	Rate of interest	Length of note	Maturity value	Date of note	Date note discounted	Discount period	Bank discount	Proceeds
$25,000	9%	60 days	$25,369.86

Answer 1

Answer:

Face Value = 25000

bank discount rate or rate of interest = 9%

Length of note = 60 days

So, interest = 25000 * 9% * 60/360 = $375

Maturity Value = 25000 + 375 = $25375

Discount Period = 60- (9 + 31 - 12) = 60- 28 = 32 days

Bank Discount = $25375* 9% * 32/360 = $203

Proceeds = Maturity Value - Bank Discount = $25375 - $203 = $25172

Note:( I have taken date of maturity March 12 & Date note discounted April 9 Because in question not given )

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