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 $) $1,210 7.1 Sept. 15 130 ---Select--- January February March April May June July August September October November December $ Date of Discount Discount Period (days) Discount Rate (%) Proceeds (in $) Dec. 8 11.9
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 $) $1,210 7.1 Sept. 15 130 ---Select--- January February March April May June July August September October November December $ Date of Discount Discount Period (days) Discount Rate (%) Proceeds (in $) Dec. 8 11.9
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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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 $) |
|---|---|---|---|---|---|
| $1,210 | 7.1 | Sept. 15 | 130 | ---Select--- January February March April May June July August September October November December | $ |
| Date of Discount |
Discount Period (days) |
Discount Rate (%) |
Proceeds (in $) |
||
| Dec. 8 | 11.9 |
Expert Solution
Step 1
Discounted means receive a cash on the behalf of instrument before the maturity. Total proceeds is equal to total maturity value minus discounted amount.
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