On June 29, a retailer buys goods worthy P3,000. To take advantage of a 5% cash discount, the retailer signs a 60-day noninterest - bearing note at his bank. The bank charges 11% interest in advance on short-term loans. What should be the face value of this note to give the retailer the exact amount needed to pay cash for the goods.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On June 29, a retailer buys goods worthy P3,000.
To take advantage of a 5%
cash discount, the retailer signs a 60-day
noninterest - bearing note at his bank.
The bank charges 11% interest in advance on
short-term loans. What should be
the face value of this note to give the retailer the
exact amount needed to pay
cash for the goods.
Transcribed Image Text:On June 29, a retailer buys goods worthy P3,000. To take advantage of a 5% cash discount, the retailer signs a 60-day noninterest - bearing note at his bank. The bank charges 11% interest in advance on short-term loans. What should be the face value of this note to give the retailer the exact amount needed to pay cash for the goods.
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