Explanation Given Information: Face value is $ 2 , 000 , the discount rate is 7 1 2 % , the time period is 1 year. Formula used: The formula to compute the amount of bank discount is, Bank Discount = Face value × Discount Rate × Time The formula to calculate the amount of proceeds is, Proceeds = Face value − Discount Calculation: Consider that the face value of the loan is $ 2 , 000 , the discount rate is 7 1 2 % and the time period is 1 year. Simplify the discount rate as 7 1 2 % = 15 2 % = 7.5 % = 7.5 100 = 0.075 Compute the amount of bank discount by substituting $ 2 , 000 for face value, 0

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305886803

Author: Brechner

Publisher: Cengage

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Chapter 10.III, Problem 3RE

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To calculate: The amount of bank discount and proceeds using the ordinary interest method where face value is $2,000, the discount rate is 712%, the time period is 1 the year.

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Chapter 10.III, Problem 2RE

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Chapter 10 Solutions

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 and proceeds using the ordinary interest method where face value is $ 2 , 000 , the discount rate is 7 1 2 % , the time period is 1 the year.

Solution Summary: The author calculates the amount of bank discount and proceeds using the ordinary interest method.

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To calculate: The amount of bank discount and proceeds using the ordinary interest method where face value is $2,000, the discount rate is 712%, the time period is 1 the year.

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Chapter 10 Solutions