Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,850 at 7% for 4 years. Use ordinary interest as needed. a. Calculate the simple interest note proceeds. Simple interest note proceeds $ Simple discount note proceeds b. Calculate the simple discount note proceeds. 24,128 $ 13,572

Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,850 at 7% for 4 years. Use ordinary interest as needed. a. Calculate the simple interest note proceeds. Simple interest note proceeds $ Simple discount note proceeds b. Calculate the simple discount note proceeds. 24,128 $ 13,572

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a…

A: Notes payable is a promise to pay certain amount by the buyer to the seller on a date and interest…

Q: Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple…

A: Simple interest: concept and terminology. Simple interest is a type of fee that is charged (or…

Q: John Doe has a choice of two different notes that both have a a face value ( principal) of $15,000…

A: Simple Interest Note: 15000 x 8% x 60/360 = $200 simple discount Note = Interest Owed will be zero…

Q: wilson Montgomery was curous about the difference between a simple discount note and a simple…

A: A discount note is a financial instrument issued by a borrower, generally a corporation, or…

Q: You decide to discount a$5250, 345-day note at 3% to your bank at a discount rate of 4.5% on day…

A: Calculation of Proceeds:Assuming there are 360 days in a year.The proceeds are $5,309.80.Excel…

Q: The following loan was paid in full before its due date. a) Find the value of h using an appropriate…

A: Given: APR = 8.7% Regular Monthly Payment = $214. Number of payments after Payoff (n) =4

Q: Paul and Sandy Moede signed an $8,100 note at Citizen's Bank. Citizen's charges a 6.4% discount…

A: A note is a debt instrument where the borrowing party promises to pay back the face value of the…

Q: The face value of a simple interest note and bank discount note is $8,000each. Assume both notes…

A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Consider a $5,000, 6%, 180-day interest-bearing note and a non-interest- bearing note for the same…

A: The notes are used by borrowers for raising funds that are categorized as interest bearing and…

Q: A bank wishes to earn a 17% simple interest in discounting notes. If the term of the discount is 3…

A: Simple Interest: When the interest on the borrowed amount is computed on the principal at the loan…

Q: Assume you take out a car loan of $8,600 that calls for 48 monthly payments of $300 each. a.…

A: Annual Percentage Rate(APR) is the specified rate of interest charged by any of the authorizing…

Q: Suppose you borrow from a bank $1,756.06 today (t=0). You agree to pay back $3,637.64 in 4 years…

A: Borrowing = 1756.06 Paying Back Amount = 3637.64 Time Period (N) = 4 years Interest Rate = ?

Q: A man makes a simple discount note with a face value of $2,700, a term of 120 days, and a 9%…

A: Formula: Discount amount = Face value of note x discount rate x number of days Multiplying face…

Q: Find the discount and proceeds on a $3,260 face-value note for three months if the discount rate is…

A: In the context of the given question, we are to required compute the discount and the proceeds from…

Q: Q.Mr. Jasim receives a note for $60,000 which is due in 180 days with simple interest rate of 15%.…

A: Amount of note= $60,000 Time to maturity= 180 days Discount rate= 12% Discount charges:…

Q: Investigate the effect of the interest rate on simple interest amortized auto loans by finding the…

A: Computation of monthly payment and total interest: Excel spreadsheet:

Q: A man makes a simple discount note with a face value of $2,500, a term of 120 days, and an 18%…

A: Note receivable refers to a negotiable instrument. It represents the claim amount due on the…

Q: Paul and Sandy Moede signed an $7,500 note at Citizen’s Bank. Citizen’s charges a 5.4% discount…

A: a) Bank discount on the loan or maturity value of $7,500 with a rate of 5.4% and time of 270 days is…

Q: Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a…

A: Interest Rate = 8% Term of Note = 3 Years Note Amount = $20,050

Q: Loan A: $135,538 at a 5.0 percent discount rate Loan B: $125.538 at a 4.0 percent discount rate Loan…

A: Present value = Loan/(1+discount rate)n Interest = Loan - present value Cost of loan =Interest/net…

Q: Investigate the effect of the interest rate on simple interest amortized auto loans by finding the…

A: Compound = monthly = 12 Time = 4 * 12 = 48 Present value = pv = $15,000

Q: You are told that a note has repayment terms of $1,700 per quarter for 6 years, with a stated…

A: The principal amount of the loan or a note is the amount which is actually the amount which has been…

Q: If you sign a discount note for $7,500 at a bank discount rate of 5% for 3 months, what is the…

A: Fist we need to calculate the bank discount.The bank discount is calculated as follows where the…

Q: The face value of a simple discount note is $17,000. The discount is 4% for 160 days. Calculate the…

A: Given information in question Simple discount note is $17,000 Discount is 4% for 160 days Purchase…

Q: A borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a…

A: Interest expense is the interest to be paid on borrowings done. It is calculated by considering rate…

Question

Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple
discount note. Both had the same terms: $18,850 at 7% for 4 years. Use ordinary interest as needed.
a. Calculate the simple interest note proceeds.
Simple interest note proceeds
$
Simple discount note proceeds
b. Calculate the simple discount note proceeds.
$
24,128
13,572
< Prev
5 of 8
Next >

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: a) The calculation of simple interest note proceeds is as follows-

VIEW

Step 3: b) The calculation of simple discount note proceeds is as follows-

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $20,050 at 8% for 3 years. Use ordinary interest as needed. a. Calculate the simple interest note proceeds. Simple interest note proceeds b. Calculate the simple discount note proceeds. Simple discount note proceeds
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $19,500 at 8.00% for 2 years. Compare the proceeds. Face value Interest Rate: Term: 19,500 Required: Using the information above please answer the following: 1. What is the simple interest note? 2. Proceed amount 3. Simple discount note proceeds: Navigation: 1. Use the Open Excel in New Tab button to launch this question. 2. When finished in Excel, use the Save and Return to Assignment button in the lower right to return to Connect. Open Excel in new tab
You are told that a note has repayment terms of $1,700 per quarter for 6 years, with a stated interest rate of 8%. How much of the total payment is for principal, and how much is for interest? Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, eg. 5,275.25.) Total payment for principal Total interest Determine if the total interest will be higher or lower than with an annual payment. The total interest will be than with an annual payment.
Consider a $5,000, 6%, 180-day interest-bearing note and a non-interest- bearing note for the same amount and time period with a bank discount of 6%. From the borrower’s point of view, which is the better loan and why?
You decide to discount a$5250, 345-day note at 3% to your bank at a discount rate of 4.5% on day 210. What are the proceeds?
The following loan was paid in full before its due date. a) Find the value of h using an appropriate formula. b) Use the actuarial method to find the amount of unearned interest. c) Find the payoff amount. Regular Monthly Payment APR # of Payments Remaining after Payoff 8.7% 4 $214 What is the finance charge per $100 financed? h = $ (Round to the nearest cent.) The unearned interest is about $ (Round to the nearest cent.) The payoff amount is $ Enter your answer in each of the answer boxes. f12 inser f9 f1o f7 fg f6 f4 f5 esc 5 7 8. %24 3 %23
Note: Round all answers to the nearest cent when necessary. Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan. Purchase(Cash)Price DownPayment AmountFinanced MonthlyPayment Number ofPayments FinanceCharge TotalDeferredPaymentPrice $2,600 0 $2600 $189.69 18 $814.42 $ ??
Subject - account Please help me. Thankyou.
A loan of 15700 was charged a simple discount rate of 4.2%. If the proceeds received were 15463.72, find the amount of bank discount. Hence, find the discount period in days.
Problem: (Computing the Proceeds from Discounted Notes) Determine the proceeds from each of the following discounted customer notes: a. An P8,000, 60-day, non-interest-bearing note discounted after 15 days at 12% b. A P12,000, 12% 60 day note discounted after 30 days at 14% c. A P6,000, 10% 90-day note discounted after 30 days at 12% d. A P10,000, 12% 120-day note discounted after 45 days at 15%. Please answer the questions above with correct solution and answer. Thank you.
The face value of a simple discount note is $17,000. The discount is 4% for 160 days. Calculate the following.a. Amount of interest charged for each note. (Round your answer to the nearest cent.) Amount of interest b. Amount borrower would receive. (Round your answer to the nearest cent.) Amount receive c. Amount payee would receive at maturity. Amount receive at maturity d. Effective rate (Round your answer to the nearest tenth percent.) Effective rate %
I. Complete the table. Fil in the blanks of the table involvinga simple interest. PRINCIPAL RATE TIME INTEREST P8,000 1) 7 months P210 P15, 000 4. 8% 2) P300 3) 4. 5% 4 months P500 P1, 000 4) 1 year and 3 months P70 P4, 500 0. 25% 5 and haf year 5)