Explanation Given Information: Face value is $ 75 , 000 , discount rate is 5 % , date of note is 7 May and time period is 53 days. Formula used: The formula to calculate the time for ordinary interest is, Time = Number of days of a loan 360 The formula to compute the amount of bank discount is, Bank Discount = Face value × Discount Rate × Time The formula to calculate amount of proceeds is, Proceeds = Face value − Discount Steps for determining maturity date are: Step1. Calculate the number of days that are left in the month loan is taken by subtracting the loan date from the number of days in the month. Step2. Subtract the number of days remaining in the first month from the total duration of loan. Step3. Keep on subtracting the days from consequent months until the maturity date corresponds to the difference. Calculation: Consider the face value of loan is $ 75 , 000 , discount rate is 5 % and time period is 53 days. Compute the discount amount, Simplify the discount rate as, 5 % = 5 100 = 0.05 Evaluate the time as, Time = Number of days of a loan 360 = 53 360 Substitute $ 75 , 000 for face value, 0.05 for discount rate and 53 360 for time in the formula “ Bank Discount = Face value × Discount Rate × Time ” as, Bank Discount = Face value × Discount Rate × Time = 75000 × 0

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305886803

Author: Brechner

Publisher: Cengage

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Chapter 10.III, Problem 10RE

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To calculate: The amount of bank discount, proceeds value and maturity date where face value is $75,000, discount rate is 5%, date of note is 7 May and time period is 53 days.

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Chapter 10.III, Problem 9RE

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Contemporary Mathematics for Business & Consumers

Ch. 10.I - Find the amount of interest on each of the...Ch. 10.I - Joe Hale goes to a credit union and borrows...Ch. 10.I - Prob. 3TIE Ch. 10.I - Prob. 4TIE Ch. 10.I - a. A loan was made on April 4 and had a due date...Ch. 10.I - a. What is the maturity date of a loan taken out...Ch. 10.I - Prob. 1RE Ch. 10.I - Prob. 2RE Ch. 10.I - Prob. 3RE Ch. 10.I - Prob. 4RE

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The amount of bank discount, proceeds value and maturity date where face value is $ 75 , 000 , discount rate is 5 % , date of note is 7 May and time period is 53 days.

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To calculate: The amount of bank discount, proceeds value and maturity date where face value is $75,000, discount rate is 5%, date of note is 7 May and time period is 53 days.

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