Author Question: The face value of a note is 5,290 with an interest rate of 8. The time is based on 60 days in a ... (Read 34 times)

Pineapplelove6 · **on:** Jun 24, 2018

The face value of a note is 5,290 with an interest rate of 8. The time is based on 60 days in a 360-day year, and the loan was taken out on March 17. The note has been discounted 16 on April 3. What are the proceeds?

Question 2

Mr. and Mrs. Jacobson borrowed 5,000 at an ordinary simple interest rate of 11 for 180 days. If they took the loan out on October 16, what is the due date? Assume a nonleap year.

efwsefaw · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

5,258.08;
The due date is May 16. The time from April 3 to May 16 is 43 days.
The interest is I = P R T or 70.53. The maturity value is 5,290 + 70.53 = 5,360.53. The bank discount is B = M D T or 102.45. The proceeds are 5,360.53 - 102.45 = 5,258.08.

Answer to Question 2

April 14;
15 more days in October, 30 days in November, 31 days in December, 31 days in January, 28 days in February, and 31 days in March is 166 days. 180 - 166 = 14, so the due date is April 14.