Raindrop Inc owes a past due bill to Jax Corp. On August 8, Jax agrees to accept a $5000, 8%, 120-day note as payment from Raindrop. On October 11, Jax discounts the note at Park Bank at 9%. Find the: (a) original interest and Maturity Value that Raindrop will pay, (b) discount period for Park Bank (c) Park Bank’s discount, and (d) Jax’s proceeds
Raindrop Inc owes a past due bill to Jax Corp. On August 8, Jax agrees to accept a $5000, 8%, 120-day note as payment from Raindrop. On October 11, Jax discounts the note at Park Bank at 9%. Find the: (a) original interest and Maturity Value that Raindrop will pay, (b) discount period for Park Bank (c) Park Bank’s discount, and (d) Jax’s proceeds
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Raindrop Inc owes a past due bill to Jax Corp. On August 8, Jax agrees to accept a $5000, 8%, 120-day note as payment from Raindrop. On October 11, Jax discounts the note at Park Bank at 9%. Find the: (a) original interest and Maturity Value that Raindrop will pay, (b) discount period for Park Bank (c) Park Bank’s discount, and (d) Jax’s proceeds
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