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Social Science Clinic => Business => Topic started by: lindiwe on Jun 6, 2019

Title: A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds ...
Post by: lindiwe on Jun 6, 2019

Question 1

Find the proceeds of a six-month note for $966 dated September 16, 2012, with interest at 5.45% if money is worth 5.75% on November 4, 2012.

Question 2

A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds of the note on August 13, when money is worth 7.5%.

Title: A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds ...
Post by: srodz on Jun 6, 2019

Answer 1

Maturity value:
Legal due date: March 19, 2013
Interest period: September 16, 2012 - March 19, 2013 is 184 days
P = 966; r = 0.0545; t =
S = P(1 + rt) = 966 = $992.54
Proceeds:
Discount period: November 4, 2012 - March 19, 2013 is 135 days
S = 986.44; r = .0545; t =
P = = = $971.87
Proceeds = $971.87

Answer 2

Maturity value:
Legal due date: November 4
Interest period: June 1 - November 4 = 156 days
S = P(1 + rt) = 2850 = $2924.91
Proceeds:
Interest period: August 13 - November 4 = 83 days
P = = = $2875.86
Proceeds = $2875.86

Title: Re: A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proc
Post by: Vikas Verma on Mar 10, 2020

thank you

Title: Re: A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proc
Post by: Ritik Joshi on Jul 30, 2022

Thankyou