Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 7%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.) Face value Rate of Length of Date note interest discounted Discount period Proceeds Maturity value $ (principal) note Date of note Bank discount $20,500 118 75 days July 13 August 3 days $

Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 7%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.) Face value Rate of Length of Date note interest discounted Discount period Proceeds Maturity value $ (principal) note Date of note Bank discount $20,500 118 75 days July 13 August 3 days $

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Rakesh
Compute bank discount using (A) ordinary interest, (B) proceeds, and (C) effective interest rate to the nearest hundredth. Do not round denominator in your calculation. Face Value Discount Rate Time in Days $9,000 14% 110
Compute interest and find the maturity date for the following notes. (a) date of note: June 10 Principal: $80,000 Interest Rate: 6% Term: 60 days (b) Date of Note: July 14 Principal: $50,000 Interest Rate: 7% Term: 90 days (c) Date of Note: April 27 Principal:$12,000 Interest Rate: 8% Term: 75 days
If you sign a discount note for $7,500 at a bank discount rate of 5% for 3 months, what is the effective interest rate? Round to the nearest tenth percent. Step 1 The effective interest rate is the actual interest rate charged on a discounted note and takes into account the fact that the borrower does not receive the full amount of the principal. It is calculated using the bank discount, the proceeds, and time. The bank discount is calculated as follows where the discount rate is given as a decimal and the time will be a fraction whose numerator is the given amount of time in months and denominator is 12 months. bank discount = face value ✕ discount rate ✕ time The rate was given to be 5%. As a decimal, we have . Calculate the bank discount (in $) for the $7,500 promissory note at a discount of 5% for 3 months. bank discount = face value ✕ discount rate ✕ amount of time in months 12 months = $7,500 ✕ ✕ 3 12 = $
Determine the due date and the amount of interest due at maturity on the following notes: Date of Note Face Amount Interest Rate Term of Note a. January 10* $40,000 5% 90 days b. March 19 18,000 8 180 days c. June 5 90,000 7 30 days d. September 8 36,000 3 90 days e. November 20 27,000 4 60 days *Assume that February has 28 days. Assume 360-days in a year when computing the interest. Note Due Date Interest a. $fill in the blank 2 b. fill in the blank 4 c. fill in the blank 6 d. fill in the blank 8 e. fill in the blank 10
The following interest-bearing promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.) Face Value Interest Rate (%) Date of Note Term of Note (days) Maturity Date Maturity Value (in $) $750 141 June 9 135 ---Select--- * $ 794.96 2 Date of Discount Discount Period (days) Sept. 5 × Discount Rate (%) 15.5 $ tA Proceeds (in $)
25. The following interest-bearing promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.) FaceValue InterestRate (%) Date ofNote Term ofNote (days) MaturityDate MaturityValue(in $) $2,200 12 Mar. 7 80 $ Date ofDiscount DiscountPeriod (days) DiscountRate (%) Proceeds(in $) Apr. 15 19 $
Compute bank discount using (A) ordinary interest, (B) proceeds, and (C) effective interest rate to nearest hundredth. Do not round denominator in your calculation. Face Value Discount Rate Time in Days $12,000 13% 120
Determine Due Date and Interest on Notes Determine the due date and the amount of interest due at maturity on the following notes. When calculating interest amounts, assume there are 360 days in a year. Round intermediate calculations to 4 decimal places, and round your final answers to the nearest whole dollar. Date of Note Face Amount Interest Rate Term of Note a. January 15 $73,400 11 % 30 days b. April 1 17,375 13 90 days c. June 22 31,500 12 45 days d. August 30 23,265 10 120 days e. October 16 12,530 12 50 days Due Date Interest Due at Maturity a. $fill in the blank 2 b. $fill in the blank 4 c. $fill in the blank 6 d. $fill in the blank 8 e. $fill in the blank 10
Determine Due Date and Interest on Notes Determine the due date and the amount of interest due at maturity on the following notes. When calculating interest amounts, assume there are 360 days in a year. Round intermediate calculations to 4 decimal places, and round your final answers to the nearest whole dollar. Date of Note a. January 15 April 1 b. C. d. e. a. b. C. d. e. June 22 August 30 October 16 Due Date Feb. 14 Jun. 38 Aug. 6 Dec. 28 Dec. 5 Face Amount $44,175 $ 12,350 19,800 20,535 10,935 Interest Due at Maturity Interest Rate 9% 9 13 13 8 Term of Note 30 days 90 days 45 days 120 days 50 days
Use the following information for Questions 6 to 10: A promissory note for $12,500 was written on February 9 for 120 days at 7%. It was discounted on May 15 at 11.5%. 6. 7. Find the maturity value of the note. Find the maturity date of the note. 8. Find the term of the discount. Find the discount amount. Find the proceeds. 9. 10. Attempt only if you can solve all parts I'll upvote your answer otherwise I'11 downvote

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