Question

Robinson’s, an electrical supply company, sold $7,400 of equipment to Jim Coates Wiring, Inc. Coates signed a promissory note May 12 with 4.6% interest. The due date was August 10. Short of funds, Robinson’s contacted Capital One Bank on July 20; the bank agreed to take over the note at a 6.3% discount. (Use Days in a year table.)

What proceeds will Robinson’s receive? (Use 360 days a year. Do not round intermediate calculations. Round your final answer to the nearest cent.)

Answer 1

Solution:-

To Calculate Proceeds will Robinson's Recieve-

Total Days-

May = 31 days - 12 days = 19 days

June = 30 days

July = 31 days

August = 10 days

Total Days = 19 days + 30 days + 31 days + 10 days

Total Days = 90 days

Interest on Loan =

Interest on Loan = $85.10

Total Due = $7,400 + $85.10

Total Due = $7,485.10

If Discount applies to whole amount, For the whole time.

Discount =

Discount = $471.56

Amount recieved = $7,485.10 - $471.56

Amount recieved = $7,013.54

If you have any query related to question then feel free to ask me in a comment.Thanks.